Disappointing June for Global Air Demand

Passenger demand experienced a slight improvement in June 2021 in both domestic and international travel, indicated the International Air Transport Association (IATA) announced through a press release. However, the association points out that air travel is still below its pre-pandemic levels, particularly due to international travel restrictions.

According to IATA, globally, “total demand for air travel in June 2021, measured in revenue passenger kilometers (RPKs), was down 60.1 percent compared to June 2019.” There has been a recovery in the sector in terms of demand, “international passenger demand in June was 80.9 percent below June 2019,” which sounds dramatically low. However, this is actually “an improvement from the 85.4 percent decline recorded in May 2021” when compared to two years ago, showing there is a small recovery in international demand.

“We are seeing movement in the right direction, particularly in some key domestic markets. But the situation for international travel is nowhere near where we need to be. June should be the start of peak season, but airlines were carrying just 20 percent of 2019 levels. That is not a recovery, it is a continuing crisis caused by government inaction,” said Willie Walsh, Director General of IATA.

What About Mexico?

Demand for the country has also been recovering, with national demand surging. International traffic is also recovering, albeit at a much smaller pace. According to the Ministry of Communications and Transportation (SCT), during 1H2021, international traffic was only 50 percent of what it was in 1H2019. SCT data suggests that on average international flights from and to Mexico have an occupancy rate of 67.8 percent.

While traffic remains low, some airlines are soaring. Volaris, a low-cost Mexican airline, is seeing a positive outcome after the pandemic, according to its recently published 2Q2021 results. In terms of revenue, the airline experienced an increase of 38 percent when compared to 2019. The number of passengers also increased dramatically, with 10 percent more than in 2Q2019. The airline booked around 6.2 million passengers in 2Q2021, with national passengers increasing by 9 percent and international passengers increasing by 11 percent when compared to 2019.

In terms of total capacity, measured by available seat miles (ASM), there was an increase of 14 percent. The occupancy rate for the airline, for both national and international flights, was 86.6 percent, returning to pre-pandemic levels. “We have once again shown that Volaris’s business model is robust and can deliver superior results in various market conditions. Our team has seized the opportunities that came with the COVID-19 pandemic, making us emerge stronger in the market,” said Enrique Beltranena, President and Director General of Volaris.