International Air Traffic Comes to a Standstill

The pandemic has well and profoundly moved the bar for the aviation industry and the current changing scenario is not helping. Whilst the air passenger’s business has taken the hardest hit, the air cargo markets continue recovery path in Asia Pacific, passenger demand continues to remain severely depressed as ongoing border restrictions curb travel plans

The International Air Transport Association (IATA) has announced that the slow recovery in passenger demand came to a halt in November.

A moderate return had been slowing in place since the summer travel season in the northern hemisphere came to an end.

Total demand (measured in revenue passenger kilometres or RPKs) was down 70 percent compared to November 2019, virtually unchanged from the 70 percent year-to-year decline recorded in October.

November capacity was 58 percent below previous year levels and load factor fell 23 percentage points to 58 percent, which was a record low for the month.

International passenger demand in November was 88 per cent below November 2019, slightly worse than the 88 percent year-to-year decline recorded in October.

Capacity fell 77 per cent below previous year levels, and load factor dropped 39 percentage points to 41 percent.

Europe was the main driver of the weakness as new lockdowns weighed on travel demand.

Recovery in domestic demand, which had been the relative bright spot, also stalled, with November domestic traffic down 41 per cent compared to the prior year (it stood at 41 percent below the previous year’s level in October.

The lack of progress in the revival of international travel with demand still held back by ongoing border restrictions amid a resurgence in Covid-19 infections. Meanwhile, air cargo markets were a silver lining for the region’s carriers, supported by the recovery in global manufacturing activity.
 

In Asia Pacific, only 1.4 million international passengers were carried in November, a mere 4.6 per cent of the 30.8 million recorded in the same month of 2019. Offered seat capacity was comparatively higher at 12.5 percent of levels in the previous corresponding period. Reflecting the challenging operating conditions, particularly considering that November is high shoulder season, the region’s carriers recorded an average international passenger load factor of just 30 per cent for the month, far below the 80 percent achieved in November 2019.
 

International trade flows continued to rebound in November, buoyed by an acceleration in new export orders. As a result, cargo volumes carried by the region’s airlines increased for the third consecutive month, although demand, as measured in freight tonne-kilometres, was still down 11.3 per cent year-on-year. Airlines increased capacity by deploying converted passenger aircraft and maximising dedicated freighter utilisation, helping to ease capacity shortages as reflected in the 6.7 percentage point increase in the international freight load factor to average 69.5 percent for the month. 

The airline industry remains extremely challenging and the financial bailout will soon not be enough for the long-term survival of airlines, governments need to move ahead with plans to implement harmonised testing protocols as a part of a multi-layered and risk-based approach towards safely restoring air travel, at the same time as vaccinations are rolled out across the world.

Written by Joe Cusmano