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News Article

International Travel Lags as Domestic Flights Soar

By Alicia Arizpe | Wed, 04/21/2021 - 12:09

While the industry seems to have put the worst of the pandemic behind it, the recovery to pre-pandemic levels is still dragging for most of the sector, warns the International Air Transport Association (IATA).

Air travel seems to be picking up as COVID-19 vaccination advances. During 2021, a total of 2.4 billion passengers are expected to travel by air, according to IATA, a moderate increase over the 1.8 billion who traveled in 2020. However, demand is still a fraction of what it was in 2019 when 4.5 billion people traveled by air. This sluggish recovery is putting further pressure on airlines across the globe, which might make 2021 harder if no urgent action is taken, warns the association.

“Losses will be reduced from 2020 but the pain of the crisis increases,” said Willie Walsh, Director General of IATA. In 2021, travel demand is expected to recover to 43 percent of what it was in 2019 driven mainly by domestic travel. International travel, on the other hand, is still limited due to government restrictions and quarantines. “Government imposed travel restrictions, however, continue to dampen the strong underlying demand for international travel. Despite an estimated 2.4 billion people travelling by air in 2021, airlines will burn through a further US$81 billion of cash,” said Walsh. The association estimates that the airline industry will lose US$47.7 billion during 2021 so containing and reducing costs will continue to be a priority for airlines, especially as the industry saw its debt balloon from US220 billion to US$651 billion during the course of 2020.

IATA reiterated its call to governments to make a clear pathway for the recovery of the aviation industry through relief measures such as employment support programs. “There is a definite role for governments in providing relief measures that ensure critical employees and skills are retained to successfully restart and rebuild the industry,” said Walsh.

Mexican airlines have also felt the impact of this depressed demand but traffic is gradually picking up thanks to their strong domestic markets. Ultra-low-cost airline Volaris indicated in its March 2021 traffic report that demand measured in revenue passenger miles (RPM) was 98 of what it was in 2020. “Our March 2021 figures and our capacity management are a testament to the domestic market opportunity and to Volaris’ potential to expand its international network as the US and Central American markets recover,” said Enrique Beltranena, President and CEO of Volaris.

Ultra-low-cost airline Viva Aerobus also reported a 27.3 percent year-on-year increase in demand in March 2021. Moreover, its figures also show further growth as the 1.08 million passengers it carried that month represent a 28.6 percent increase over March 2019, putting Viva Aerobus ahead of its pre-pandemic levels.

Mexico’s flagship airline Aeroméxico also reported growth in March 2021, a 12.3 percent year-on-year increase. Also, this month Aeroméxico made history by taking its first flight to Russia, which was arranged with a cargo charter.

Alicia Arizpe Alicia Arizpe Senior Writer