Elana Shepert / Vancouver is awesome – Jul 29, 2020 / 11:07 a.m. | History: 306534
In a statement, IATA predicts that global passenger traffic will not return to pre-COVID-19 levels until 2024, a year later than expected.
The organization notes that passenger traffic for June 2020 has announced a slower-than-expected recovery. Traffic (measured in revenue passenger-kilometers or RPKs) was down 86.5% from the period a year earlier, which is only slightly better from a 91% contraction in May.
For 2020, the number of passengers worldwide is expected to fall by 55% from 2019, worsened from April forecast of 46%. That being said, IATA notes that the resumption of short-haul travel is expected to occur more quickly than for long-haul travel.
The IATA report bases its more pessimistic recovery outlook on three recent trends:
- Slow containment of the virus in the United States and developing economies: Although developed economies outside of the United States have been largely successful in containing the spread of the virus, further outbreaks have occurred in those economies and in China. In addition, there are few signs of containment of the virus in many major emerging economies which, along with the United States, account for around 40% of global air transport markets. Their continued closure, especially to international travel, is significantly slowing the recovery.
- Reduced business travel: Business travel budgets are expected to be severely limited as businesses continue to be under financial pressure even as the economy improves. Moreover, while historically GDP growth and air transport have been strongly correlated, surveys suggest that this link has weakened, especially with regard to business travel, as videoconferencing appears to have made significant progress. replacing face-to-face meetings.
- Low consumer confidence: While pent-up demand exists for VFR travel (visits from friends and relatives) and leisure travel, consumer confidence is low in the face of concerns about job security and the rise unemployment, as well as the risks of catching COVID-19. Some 55% of respondents to the June IATA passenger survey do not plan to travel in 2020.
“Passenger traffic bottomed out in April, but the strength of the recovery was very weak. The improvement we’ve seen is domestic theft. International markets remain largely closed. Consumer confidence is depressed and is not being helped by the UK’s weekend decision to impose a general quarantine on all travelers returning from Spain. And in many parts of the world, infections continue to increase. All of this points to a longer recovery period and more suffering for the industry and the global economy, ”said Alexandre de Juniac, Managing Director and CEO of IATA.