Airline passenger market expected to return to normal in 2024

The global airline passenger market is going to recover more slowly than previously predicted, the International Air Travel Association (IATA) has warned in a series of grim forecasts released on Tuesday 28 July.


The industry body that represents 290 airlines comprising 82% of global air traffic, said its previous expectations for post-pandemic recovery in the international and domestic passenger markets were being moved back by a year.



Less profitable short-haul travel will recover quicker


IATA only expects a full recovery, which includes global passenger traffic and the revenue derived per passenger (measured in revenue passenger kilometres or RPKs) in 2024. Its previous prediction was for 2023.


Short-haul travel, mainly domestic travel, is likely to recover more quickly than long-haul, mainly international, travel. As a result, passenger numbers will be back up to pre-pandemic levels by 2023. This is also a year later than previously predicted.


But, crucially for the profitability of airlines, short-haul passengers generate less revenue and so the full recovery of the airline business as a whole will only happen in 2024.

Development of a vaccine could accelerate a recovery


Amidst the gloom, IATA points out that things could still change for the better.


"Scientific advances in fighting COVID-19, including development of a successful vaccine, could allow a faster recovery," it says in its updated global passenger forecast.


"However, at present there appears to be more downside risk than upside to the baseline forecast."

Upturn in airline passengers has been weak thus far, says IATA


But Alexandre de Juniac, IATA's Director General and CEO, noted that the upturn in passenger travel had been very weak thus far.


"What improvement we have seen has been domestic flying. International markets remain largely closed," he stated.


"Consumer confidence is depressed and not helped by the UK's weekend decision to impose a blanket quarantine on all travellers returning from Spain."

Government relief measures are still needed


De Juniac said that in many parts of the world infections are still rising. All of this points to a longer recovery period and more pain for the industry and the global economy.


"For airlines, this is bad news that points to the need for governments to continue with relief measures, financial and otherwise," he observed.


Looking at the international passenger market figures for June, De Juniac said traffic was 96.8% less than in June 2019. This was a very slight improvement on the May figure of 98.3%.


Domestic passenger markets fared slightly better. Demand was 67.6% down in June 2020 versus the same month in 2019. By contrast, the decline during May was 78.4%.

The bottom line as IATA sees it


"Domestic traffic improvements notwithstanding, international traffic, which in normal times accounts for close to two-thirds of global air travel, remains virtually non-existent," De Juniac said.


"Most countries are still closed to international arrivals or have imposed quarantines that have the same effect as an outright lockdown. [Northern Hemisphere] summer, our industry's busiest season, is passing by rapidly with little chance for an upswing."


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