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Thu, 14 May 2020

IATA Takes Pessimistic Look at Future of Air Travel

New analysis from IATA shows that the damage to air travel from COVID19 extends into the medium-term, with long-haul / international travel being the most severely impacted.

IATA suggests that a risk-based layered approach of globally harmonized biosecurity measures is critical for the restart, as measures such as quarantines on arrival would only damage confidence in air travel further.

IATA and Tourism Economics modeled two air travel scenarios - a baseline scenario and a pessimistic scenario.

Baseline Scenario

This scenario is contingent on domestic markets opening in Q3, with a much slower phased opening of international markets.

Airbus A321neo. Picture by Steven Howard of TravelNewsAsia.com Click to enlarge.

Such an approach would limit the air travel recovery, despite most forecasts pointing toward a strong economic rebound late this year and during 2021.

In 2021, IATA expects global passenger demand, measured in revenue passenger kilometers (RPK), to be 24% below 2019 levels and 32% lower than IATAs October 2019 Air Passenger forecast for 2021.

IATA doesnt expect 2019 levels to be exceeded until 2023.

As international markets open and economies recover, there will be further growth in air travel from the 2020 low point. But even by 2025, IATA expects global RPK to be 10% lower than the previous forecast.

Pessimistic Scenario

This scenario is based on a slower opening of economies and relaxation of travel restrictions, with lockdowns extending into Q3, possibly due to a second wave of the virus. This would further delay the recovery of air travel.

In this case, global RPK in 2021 could be 34% lower than 2019 levels and 41% below IATAs previous forecast for 2021.

Major stimulus from governments combined with liquidity injections by central banks will boost the economic recovery once the pandemic is under control. But rebuilding passenger confidence will take longer. And even then, individual and corporate travelers are likely to carefully manage travel spend and stay closer to home, said Alexandre de Juniac, IATAs Director General and CEO.

Long-Haul Travel Impact will be Longer Lasting

When the recovery begins, it is expected to be led by domestic travel.

An IATA survey of recent air travelers conducted in April 2020 found that 58% are somewhat or very likely to restrict their initial travel to domestic journeys.

IATA believes that domestic RPK will only recover to 2019 levels by 2022 and that international RPK are only expected to return to 2019 levels in 2024.

The impacts of the crisis on long-haul travel will be much more severe and of a longer duration than what is expected in domestic markets. This makes globally agreed and implemented biosecurity standards for the travel process all the more critical. We have a small window to avoid the consequences of uncoordinated unilateral measures that marked the post-9.11 period. We must act fast, said de Juniac.

See also: Thailand to Promote Domestic Tourism First.

See latest Travel News, Video Interviews, Podcasts and other news regarding: COVID19, IATA, RPK, ASK.

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