IATA downgrades traffic forecast after dismal summer

Published September 30, 2020, 9:43 AM

by Emmie V. Abadilla

Passenger traffic is now expected to plunge lower to 66 per cent, instead of the initial 63 per cent, as the International Air Transport Association (IATA) further downgraded its 2020 forecast to reflect a weaker-than-expected recovery.

The summer travel season in the Northern Hemisphere ended dismally as August passenger demand plummeted versus normal levels.

“International demand recovery is virtually non-existent,” summed up Alexandre de Juniac, IATA’s Director General and CEO.

Revenue passenger kilometers (RPKs) plummeted 75.3% compared to August 2019.

“August’s disastrous traffic performance puts a cap on the industry’s worst-ever summer season,” he observed.

Even forecasts for December, a peak travel period, is glum, down 68% versus a year ago.

Domestic markets continued to outperform international markets in terms of recovery, although most remained substantially down on a year ago.

August capacity (available seat kilometers or ASKs) was down 63.8% compared to a year ago, and load factor plunged 27.2 points to an all-time low for August of 58.5%.

The  return of government restrictions in the face of new COVID-19 outbreaks halted the recovery in air passenger services in mid-August.

“Domestic markets in Australia and Japan actually regressed in the face of new outbreaks and travel restrictions,” de Juniac lamented.

August international passenger demand plummeted 88.3% compared to August 2019, mildly improved over the 91.8% decline recorded in July.

Capacity sagged 79.5%, and load factor fell 37.0 percentage points to 48.7%.

Asia-Pacific airlines’ August traffic sank 95.9% compared to the year-ago period, barely budged from a 96.2% drop in July, and the steepest contraction among regions.

Capacity dived 90.4% and load factor shrank 48.0 percentage points to 34.8%.

Middle Eastern airlines had a 92.3% fall in demand for August, compared with a 93.3% decline in July.

Capacity collapsed 81.9%, and load factor sank 47.1 percentage points to 35.3%.

North American carriers’ traffic tumbled 92.4% in August, little changed compared to 94.4% decline in July.

Capacity fell 82.6%, and load factor plunged 49.9 percentage points to 38.5%.

Latin American airlines had a 93.4% demand drop in August compared to the same month last year, versus a 94.9% drop in July.

Capacity crumbled 90.1% and load factor dropped 27.8 percentage points to 56.1%, second highest among the regions.

European carriers’ August demand plunged 79.9% compared to last year, improved from an 87.0% drop in July, as travel restrictions were lifted in the Schengen Area.

However, more recent flight data suggests this trend reversed amid a return to lockdown and quarantine in some markets.

Capacity fell 68.7% and load factor dropped by 32.1 percentage points to 57.1%, which was the highest among regions.

African airlines’ traffic sank 90.1% in August, slightly improved over a 94.6% decline in July.

Capacity contracted 78.4%, and load factor fell 41.0 percentage points to 34.6%, which was the lowest among regions.

Domestic traffic fell 50.9% in August. This was a mild improvement compared to a 56.9% decline in July.

Domestic capacity fell 34.5% and load factor dropped 21.5 percentage points to 64.2%.

“Traditionally, cash generated during the busy summer season in the Northern Hemisphere provides airlines with a cushion during the lean autumn and winter seasons,” de Juniac noted. “This year, airlines have no such protection.”

Globally, tens of millions of jobs depend on aviation. If borders don’t reopen the livelihoods of these people will be at grave risk.

“We need an internationally agreed regime of pre-departure COVID-19 testing to give governments confidence to reopen borders and passengers the confidence to travel by air again,” de Juniac concluded.