Aviation May Not Recover Until 2024: IATABy Alicia Arizpe | Fri, 07/31/2020 - 11:42
The aviation industry’s troubles continue to ramp up as the COVID-19 crisis shows no sight of abating, leading the International Air Transport Association (IATA) to revise previous recovery projections and warn that the industry will not return to pre-COVID-19 levels until 2024. Under these circumstances, IATA representatives reiterated their call on governments to support the troubled industry.
As measures to contain the spread of COVID-19 took hold, air traffic levels plummeted to lows not seen in many years. The industry seemed to hit its lowest point in April and began a slow recovery in the following months, which raised expectations among in the sector. However, the recovery was slower than expected, warned IATA, which points to a prolonged convalescence period for the sector. “Passenger traffic hit bottom in April but the strength of the upturn has been very weak. What improvement we have seen has been domestic flying. International markets remain largely closed,” said Alexandre de Juniac, Director General and CEO of IATA. In April 2020, IATA reported a 94.3 percent year-on-year contraction in demand. May was a bit better with a 91 percent reduction, while June showed an 86.5 percent contraction. While these numbers may indicate that the worst has passed, they are still too low as passengers continue to avoid air travel. “Consumer confidence is depressed and not helped by the UK’s weekend decision to impose a blanket quarantine on all travelers returning from Spain. And in many parts of the world infections are still rising. All of this points to a longer recovery period and more pain for the industry and the global economy,” said de Juniac.
These circumstances led IATA to revise its projections. The association estimates that in a best-case scenario, traffic measured in revenue passenger kilometers (RPK) will not recover to pre-COVID-19 levels until 2024. The main challenges the sector faces are the slow containment of COVID-19 in the US and emerging economies, which together represent 40 percent of the market for air travel, poor consumer confidence and less corporate travel.
The numerous challenges hurting the industry led IATA to reiterate its request for support from local governments. In a recent press conference, Peter Cerdá, Regional Vice President for the Americas at IATA, highlighted that airlines in Mexico were in line to lose US$8.68 billion in revenue during 2020. Cerdá also pointed that the organization hoped to meet with the new Minister of Communications and Transport (SCT) Jorge Arganis Díaz, who replaced Javier Jiménez Espriú, to discuss measures to support the sector.