Dismal summer has IATA begging for COVID-19 testing and border openings

September 30, 2020
Credit: Jim Woodrow.

A dismal summer in the northern hemisphere with second wave outbreaks of COVID-19 has left airline industry growth forecasts from IATA in tatters with the industry calling for agreed testing to enable border re-openings.

The full-year 2020 traffic is expected to be 66 per cent down on last year, 3 per cent decline on the previous forecast from The International Air Transport Association (IATA) but the decline in traffic since COVID-19 struck in March is far worse.

The Asia Pacific region is the worse hit with August traffic sinking 95.9 per cent compared to the year-ago period. Capacity dived 90.4 per cent and load factor shrank 48.0 percentage points to a dismal 34.8 per cent.

IATA director general and chief executive Alexandre de Juniac, has pleaded for “an internationally agreed regime of pre-departure COVID-19 testing to give governments the confidence to reopen borders, and passengers the confidence to travel by air again.”

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

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He warned that “absent of additional government relief measures and reopening of borders, hundreds of thousands of airline jobs will disappear.”

“But it is not just airlines and airline jobs at risk. Globally tens of millions of jobs depend on aviation. If borders don’t reopen the livelihoods of these people will be at grave risk.”

The industry association said that August passenger demand continued to be hugely depressed against normal levels, with revenue passenger kilometres (RPKs) down 75.3 per cent compared to August 2019.

IATA said that domestic markets continued to outperform international markets in terms of recovery, although most remained substantially down on a year ago with load factors at 58.5 per cent compared to the typical 80 per cent and higher.

The industry association said that the recovery in air passenger services was brought to a halt in mid-August by a return of government restrictions in the face of new COVID-19 outbreaks in a number of key markets.

Forward bookings have also suffered and whereas the decline in year-on-year growth of global RPKs was expected to have moderated to -55 per cent by December, IATA says a much slower improvement is now expected with the month of December forecast to be down 68 per cent on a year ago.

Mr de Juniac added, “August’s disastrous traffic performance puts a cap on the industry’s worst-ever summer season.”

“International demand recovery is virtually non-existent and domestic markets in Australia and Japan actually regressed in the face of new outbreaks and travel restrictions,” Mr de Juniac said.