Etihad now expects global air travel demand to recover only by 2024

Dubai: Etihad Airways on Sunday slashed its outlook for a full recovery in air travel demand. The carrier now expects passenger numbers on its routes to return to pre-COVID levels only by 2024.

“We're expecting to see stronger demand certainly in the second half of the year (2021),” said Martin Drew, Senior Vice President Sales & Cargo at Etihad.

However, a return to 2019 levels will happen much later. “Our latest view is that we'll see a full recovery now by 2024; previously it was 2023,” he added.

Demand is there

“I think when the restrictions start to get lifted, the segments that will come back first will be certainly VFR (visiting friends and relatives), and also leisure,” said Drew “Business travel is going to take some time to return”

The airline is already seeing higher numbers on ‘ethnic’ routes such as Pakistan and Bangladesh, the executive said, during a media briefing on Sunday.

Travel Pass in April

Etihad, which is among the three Gulf carriers working with IATA on its ‘Travel Pass’ initiative, said passenger trials will begin in April on its North American routes.

Travel Pass will allow passengers to have a digital passport verified with all their pre-travel test or vaccination details to meet the requirements at the end destination. They will also be able to share test and vaccination certificates with authorities and airlines to facilitate smoother processing at airports.

Youlten said that IATA’s platform was only one of the travel passes the airline is currently exploring.

“We've been waiting to ensure that the travel pass that we trial is in fact as efficient for the guests as it is for the airline, and that as I said is the major challenge that all of the developers are facing across a number of products,” said Chris Youlten, Executive Director Operations Strategy at Etihad.

“It is a very difficult app to put together… primarily because at the back end, a travel pass is going to have to be able to collect the medical records of passengers ...and that is a very complex world to get into,” he added.

Cargo’s strong run continues

The cargo business has done well for Etihad and its peers after passenger demand took a nosedive in the wake of the pandemic.

This year, we are “effectively waiting to replicate what we achieved in 2020,” said Drew. “And I think that the demand that has been witnessed will go way beyond 2021 and well into 2022.”

“Cargo has been very much a lifeline for the airline … one of the great things about cargo is …it's helping us rebuild our passenger network,” he added.

The airline’s cargo operation recorded a 66 per cent increase in revenue to $1.2 billion (Dh4.41 billion) last year. This was driven by high demand for medical supplies, such as personal protective equipment (PPE) and pharmaceuticals, paired with limited global airfreight capacity. Cargo yield saw an improvement of 77 per cent.