IATA: Passenger demand goes from bad to worse

Published March 3, 2021, 9:31 AM

by Emmie V. Abadilla

Global passenger demand in January 2021 (measured in revenue passenger kilometers or RPKs) plunged 72 per cent versus January 2019, the International Air Transport Association (IATA) announced last night (March 2).

That was worse than the 69.7 percent year-over-year decline recorded in December 2020.

“2021 is starting off worse than 2020 ended and that is saying a lot,” observed Alexandre de Juniac, IATA’s Director General and CEO.

“Even as vaccination programs gather pace, new COVID variants are leading governments to increase travel restrictions,” he pointed out.

“The uncertainty around how long these restrictions will last also has an impact on future travel. Forward bookings in February this year were 78 percent below levels in February 2019.”

Overall, global passenger traffic fell in January 2021, both compared to pre-COVID levels (January 2019) and compared to the immediate month prior (December 2020).

Total domestic demand was down 47.4 percent versus pre-crisis (January 2019) levels.

In December it was down 42.9 percent on the previous year.

This weakening was largely driven by stricter domestic travel controls in China over the Lunar New Year holiday period.

International passenger demand in January was 85.6 percent below January 2019, a further drop compared to the 85.3 percent year-to-year decline recorded in December.

Asia-Pacific airlines’ January traffic plummeted 94.6 percent compared to the 2019 period, virtually unchanged from the 94.4 percent decline registered for December 2020 compared to a year ago.

The region continued to suffer from the steepest traffic declines for a seventh consecutive month.

Capacity dropped 86.5 percent and load factor sank 49.4 percentage points to 32.6 percent, by far the lowest among regions.

Middle Eastern airlines saw demand plunge 82.3 percent in January compared to January 2019, which was broadly unchanged from an 82.6 percent demand drop in December versus a year ago.

Capacity fell 67.6 percent, and load factor declined 33.9 percentage points to 40.8 percent.

“To say that 2021 has not gotten off to a good start is an understatement,” according to de Juniac.

:Financial prospects for the year are worsening as governments tighten travel restrictions,” he warned.

“We now expect the industry to burn through $75-$95 billion in cash this year, rather than turning cash positive in the fourth quarter, as previously thought.”

This is not something that the industry will be able to endure without additional relief measures from governments, de Juniac emphasized.

IATA will soon launch the IATA Travel Pass to help travelers and governments manage digital health credentials.

“But the full benefit of IATA Travel Pass cannot be realized until governments agree the standards for the information they want,” De Juniac maintained.