Europe is proving the biggest worry now for the airline industry. But even domestic demand for air travel has been tanking since summer. Image Credit: Bloomberg

Dubai: Global air travel recovery further slowed in October amid a resurgence in coronavirus cases in some parts of the world.

Passenger traffic - measured in revenue passenger kilometers - was down 88 per cent year-over-year in October for international routes. Domestic routes, which were recovering much faster during summer, saw a 40 per cent decline in traffic from a year earlier.

“International markets have been flat-lining - we've seen no improvement for the last three months," said Brian Pearce, Chief Economist at International Air Transport Association, during a virtual event. "I think there is some way to go before we get a decent recovery in travel.

“One of the key metrics is the passenger load factor; because this is such a capital-intensive industry you need a high load factor to breakeven. It looks as if that's happening on domestic markets.”

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Bookings disappoint

Across most destinations, holiday related travel bookings have come in way below expectations. “We're four weeks away from that typically peak travel period which is so important for the cashflow of airlines in Europe," the official added. "We would normally see 63 per cent of tickets for flying in that period already sold by today. Instead we’re 80 per cent down.”

Pearce added that even with the arrival of vaccines, it will not impact aviation markets in a “substantial” way until the second-half of 2020. “We're still a very long way from the end of that tunnel,” said the economist.


Government support will play a crucial role in keeping airlines going in the next few months. “There is a risk of widespread bankruptcies in the airline industry and that could also mean more cost to governments in terms of future bailouts,” said Hemant Mistry, Director of Airports and Fuel, IATA.

“We're really looking for governments to take some urgent action in terms of the financial aid they're providing and supplementing that with market stimulation benefits.” 

IATA released a list of ‘market stimulation options’ that can be adopted by governments to ease the burden on airlines. It includes tax exemptions, subsidies for airlines and passengers, financial incentives, and advance payments to address liquidity needs.