Demand for air travel on the rise as nations reopen their economies
Iata estimates airline industry jobs could fall by 50% and the contribution to SA's GDP could drop to R97bn from R180bn
Demand for air travel is beginning to recover across all regions after hitting rock bottom in April due to the Covid-19 crisis.
Global travel body Iata (International Air Transport Association) said on Wednesday passenger demand in April 2020 (measured in revenue passenger kilometres), plunged 94.3% compared with April 2019, as the Covid-19-related travel restrictions virtually shut down domestic and international air travel. It's an unprecedented rate of decline in Iata’s traffic analysis, which dates back to 1990.
Iata said more recent figures show that daily flight totals rose 30% between the low point on April 21 and May 27. This is primarily in domestic operations and off of a low base (5.7% of 2019 demand). The organisation said that while this uptick is not significant to the global air transport industry, it does suggest that the industry has seen the bottom of the crisis, provided there is no recurrence.
In SA, the airline industry, which counts eight players, was given the green light to operate albeit for limited business travel under level 3 of the lockdown which came into effect on June 1. The industry has been on the brink of collapse after airlines were forced to cease operations since the lockdown came into force at the end of March.
Before the onset of the crisis, airlines and tourism in SA employed about 500,000 people and contributed about R180bn to the economy. Iata has estimated that jobs could now shrink by almost 50% and the contribution to the GDP could drop to R97bn.
Alexandre de Juniac, Iata’s director general and CEO said April was a disaster for aviation as air travel almost entirely stopped.
“But April may also represent the nadir of the crisis. Flight numbers are increasing. Countries are beginning to lift mobility restrictions. And business confidence is showing improvement in key markets such as China, Germany, and the US.
“These are positive signs as we start to rebuild the industry from a stand-still. The initial green shoots will take time — possibly years — to mature,” he said.
Iata calculated that by the first week of April, governments in 75% of the markets it tracked completely banned entry, while an additional 19% had limited travel restrictions or compulsory quarantine requirements for international arrivals.
The initial flight increases have been concentrated in domestic markets. Data from late May shows that flights in the Republic of Korea, China and Vietnam have risen to a point 22%-28% lower than a year earlier.
Searches for air travel on Google also were up 25% by the end of May compared with the April low, though that’s a rise from a very low base and still 60% lower than at the start of the year.
African airlines’ traffic sank 98.7% in April, nearly twice as much as the 49.8% demand drop in March. Capacity contracted 87.7%, and load factor dived 65.3 percentage points to just 7.7% of seats filled, the lowest among all regions.
“For aviation, April was our cruelest month. Governments had to take drastic action to slow the pandemic. But that has come with the economic cost of a traumatic global recession,” De Juniac said.
He said airlines will be key to the economic recovery.
“It is vital that the aviation industry is ready with bio-safety measures that passengers and air transport workers have confidence in. That’s why the speedy implementation of International Civil Aviation Organization’s (ICAO) global guidelines for safely re-starting aviation is the top priority.”