Air travel will not return to pre-COVID-19 levels till at last 2024 according to the airline industry’s peak body.
In a sobering assessment, the International Air Transport Association (IATA) said that recovery in traffic as measured by Revenue Passenger Kilometres has been slower than expected with this year’s traffic forecast at a 46 per cent decline blown out to 55 per cent decline from 2019.
IATA says that a recovery in short-haul travel is still expected to happen faster than for long haul travel.
As a result, passenger numbers will recover faster than traffic measured in RPKs but the passenger number figure will also slide from 2022 to 2023.
IATA said that the more pessimistic recovery outlook is based on a number of recent trends led by the slow virus containment in the US and developing economies.
However, IATA said while that “developed economies outside of the US have been largely successful in containing the spread of the virus, renewed outbreaks have occurred in these economies, and in China.”
It noted that there is little sign of virus containment in many important emerging economies, which in combination with the US, represent around 40 percent of global air travel markets.
IATA’s report also noted that corporate travel budgets are expected to be very constrained as companies continue to be under financial pressure even as the economy improves and video conferencing makes significant inroads as a substitute for in-person meetings.
Of great concern is weak consumer confidence and while pent-up demand exists for VFR (visiting friends and relatives) and leisure travel, consumer confidence is weak in the face of concerns over job security and rising unemployment says IATA.
Passengers are also cautious on the risks of catching COVID-19 with some 55 percent of respondents to IATA’s June passenger survey saying don’t plan to travel in 2020.
IATA says its new modelling shows passenger numbers rising 62 percent in 2021 of the depressed 2020 base, but still will be down almost 30 per cent down compared to 2019.
A full recovery to 2019 passenger levels is not expected until 2023, one year later than previously forecast.
However due to the fact that short-haul travel will dominate because passengers want to stay close to home RPKs will recover more slowly, with that traffic measure expected to return to 2019 levels in 2024, one year later than previously forecast.
IATA says that “scientific advances in fighting COVID-19 including the development of a successful vaccine, could allow a faster recovery. However, at present, there appears to be more downside risk than upside to the baseline forecast.”
Alexandre de Juniac, IATA’s chief executive said “for airlines, this is bad news that points to the need for governments to continue with relief measures—financial and otherwise.”