Dubai: There will not be an end-of-year improvement in global air travel, with December likely to see a decline by 68 per cent in December compared to the 63 per cent fall IATA forecast earlier.
Passenger load factor - a measure of how well an airline is filling available seats – are well below breakeven on international and domestic flights. “The industry is restarting, but it looks as though it's still burning through cash - it's still making losses in its operations at the moment,” said Brian Pearce, IATA’s Chief Economist during a webinar.
“It's clear that although our data for August showed a further improvement, that more or less stopped early in the month. We've seen the market reaching at an inflection point and the improvements that we saw in summer has more or less stopped at least for the moment.”
This is mostly due to domestic flights not posting an improvement in the last six weeks. Meanwhile, Europe, which was initially showing some signs of revival, has been hit by the second wave of the coronavirus.
In the Middle East, traffic measured as revenue passenger kilometers (RPK) was down 92.3 per cent in August year-on-year, compared to a 94.9 per cent fall in July. Passenger capacity dropped 82.6 per cent, while load factor plunged 49.9 percentage points to 38.5 per cent
IATA had earlier forecast a recovery in global airline industry by 2024 (to levels seen in 2019).
Forecasts were conditional on getting a vaccine - at the moment that seems to be still on track. Clearly, we're hoping that an effective, cheaper testing regime might improve the situation which is rather gloomy at the moment
Cargo too gets dragged down
Global air cargo demand rose by 1.8 per cent in August over July - but that's still down 12.6 percent from year-ago levels, the International Air Transport Association (IATA) said on Tuesday. Further gains are being stalled by capacity constraints as much of the passenger fleet, which normally carries 50 per cent of all cargo, remain grounded.
“The peak season for air cargo will start in the coming weeks; but with severe capacity constraints, shippers may look to alternatives such as ocean and rail to keep the global economy moving,” said Alexandre de Juniac, IATA's Director-General and CEO.
Middle Eastern carriers posted a decline of 6.8 per cent in year-on-year international cargo volumes in August, compared to the 15.1 per cent fall in July. The industry body said that airlines in the region have “aggressively” added capacity in recent months with international capacity improving from a 42 per cent fall at the lowest point in April to a decline of 24.2 per cent in August. This made it the most resilient of all regions.
Meanwhile, demand on trade routes to and from Asia and North America remained strong, with demand down by only 3.3 per cent and up 2.3 per cent year-on-year, said IATA.