IATA downgrades 2020 traffic forecast following poor summer season

The International Air Transport Association (IATA) has announced that it has downgraded its traffic forecast for 2020 to reflect a weaker than expected recovery, as evidenced by a dismal end to the summer travel season in the Northern Hemisphere. IATA now expects full-year 2020 traffic to be down by 66 per cent when compared to 2019 levels. The previous estimate was a 63 per cent decline.

August 2020 passenger demand continued to be hugely depressed against normal levels, with revenue passenger kilometers (RPKs) down by 75.3 per cent when compared to August 2019. This was only slightly improved compared to the 79.5 per cent annual contraction in July 2020.

Domestic markets continued to outperform international markets in terms of recovery, although most remained substantially down on a year ago. August capacity (available seat kilometers or ASKs) was down by 63.8 per cent compared to a year ago, and load factor plunged 27.2 points to an all-time low for August of 58.5 per cent.

Based on flight data, the recovery in air passenger services was brought to a halt in mid-August 2020 by a return of government restrictions in the face of new COVID-19 outbreaks in a number of key markets. Forward bookings for air travel in the fourth quarter show that the recovery since the April 2020 low point will continue to falter.

Whereas the decline in year-on-year growth of global RPKs was expected to have moderated to 55 per cent by December 2020, a much slower improvement is now expected with the month of December forecast to be down 68 per cent on a year ago. 

IATA’s Director General and CEO, Alexandre de Juniac, said: “August’s disastrous traffic performance puts a cap on the industry’s worst-ever summer season. International demand recovery is virtually non-existent and domestic markets in Australia and Japan actually regressed in the face of new outbreaks and travel restrictions. A few months ago, we thought that a full-year fall in demand of 63 per cent compared to 2019 was as bad as it could get. With the dismal peak summer travel period behind us, we have revised our expectations downward to 66 per cent.”

“Traditionally, cash generated during the busy summer season in the Northern Hemisphere provides airlines with a cushion during the lean autumn and winter seasons. This year, airlines have no such protection. Absent additional government relief measures and a reopening of borders, hundreds of thousands of airline jobs will disappear. But it is not just airlines and airline jobs at risk. Globally, tens of millions of jobs depend on aviation. If borders don’t reopen, the livelihoods of these people will be at grave risk. We need an internationally-agreed regime of pre-departure COVID-19 testing to give governments the confidence to reopen borders, and passengers the confidence to travel by air again,” said de Juniac.