The airline industry is in a catastrophic situation and needs more help from governments to stay viable through the pandemic says IATA.
That is the stark message from Alexandre de Juniac, the International Air Transport Association’s director general and chief executive as he delivers the industry’s report card for 2020 declaring it the worst year ever.
Mr de Juniac said that with an overall decline in traffic of 65.9 percent for 2020 and forward bookings into 2021 tanking the situation is dire.
“Last year was a catastrophe, there is no other way to describe it.
“What recovery there was over the Northern hemisphere summer season stalled in autumn and the situation turned dramatically worse over the year-end holiday season, as more severe travel restrictions were imposed in the face of new outbreaks and new strains of COVID-19,” Mr de Juniac said.
“Optimism that the arrival and initial distribution of vaccines would lead to a prompt and orderly restoration in global air travel have been dashed in the face of new outbreaks and new mutations of the disease.
“The world is more locked down today than at virtually any point in the past 12 months and passengers face a bewildering array of rapidly changing and globally uncoordinated travel restrictions.
“We urge governments to work with industry to develop the standards for vaccination, testing, and validation that will enable governments to have confidence that borders can reopen and international air travel can resume once the virus threat has been neutralized.
“In the meantime, the airline industry will require continued financial support from governments in order to remain viable,” said Mr de Juniac.
Broken down into sectors, IATA says international passenger demand (measured in revenue passenger kilometers or RPKs) in 2020 was 75.6 percent below 2019 levels with capacity, (measured in available seat kilometers or ASKs) declined 68.1 percent and load factor fell 19.2 percentage points to 62.8 percent.
Domestic demand was a little better down 48.8 percent compared to 2019 with capacity contracted by 35.7 percent and load factor down 17 percentage points to 66.6 percent.
Bookings for future travel made in January 2021 were down 70 percent compared to a year ago, putting further pressure on airline cash positions and potentially impacting the timing of the expected recovery IATA says.
Its baseline forecast for 2021 is for a 50.4 percent improvement on 2020 demand that would bring the industry to 50.6 percent of 2019 levels.
It says that while this view remains unchanged, there is significant downside risk if more severe travel restrictions in response to new variants persist.
IATA says that should such a scenario materialize, demand improvement could be limited to just 13 percent over 2020 levels, leaving the industry at 38 percent of 2019 levels.
The worst impacted were Asia-Pacific airlines with full-year traffic plunging 80.3 percent in 2020 compared to 2019. Full-year capacity was down 74.1 percent compared to 2019 and load factor fell 19.5 percentage points to 61.4 percent.
And in December it fell 94.7 percent amid stricter lockdowns.
The least impacted was China with domestic passenger traffic down just 30.8 percent in 2020 compared to 2019.
And in December it was down just 7.6 percent versus December a year-ago period which was a slight deterioration compared to a 6.3 percent decline in November amid new outbreaks and resulting restrictions.