The recovery in air travel has virtually stalled amid elevated Covid-19 cases and re-introduction of travel restrictions in some regions across the globe to slow the spread of a new, more aggressive strain of the coronavirus.
The resurgence of the virus and associated restrictions weighed on air travel recovery progress across many domestic and international markets.
Europe remained the most severely impacted region due to strict containment measures. That said, recovery accelerated for another month in Latin America, data provided by International Air Transport Association show.
Recovery in passenger demand, which had been slowing since the Northern hemisphere’s summer travel season, came to a halt in November 2020, IATA stated recently.
Total demand (measured in revenue passenger kilometres or RPKs) was down 70.3% compared to November 2019, virtually unchanged from the 70.6% year-to-year decline recorded in October.
November capacity was 58.6% below previous year levels and load factor fell 23.0 percentage points to 58.0%, which was a record low for the month.
International passenger demand in November was 88.3% below November 2019, slightly worse than the 87.6% year-to-year decline recorded in October.
Capacity fell 77.4% below previous year levels, and load factor dropped 38.7 percentage points to 41.5%.
Europe was the main driver of the weakness as new lockdowns weighed on travel demand.
Recovery in domestic demand, which had been the relative bright spot, also stalled, with November domestic traffic down 41% compared to the prior year (it stood at 41.1% below the previous year’s level in October).
Capacity was 27.1% down on 2019 levels and the load factor dropped 15.7 percentage points to 66.6%.
Industry experts say the emergence of more infectious strains of Covid-19 and the consequent restrictions placed on travel to and from the UK, Denmark and South Africa could have significant implications for the airline industry’s recovery path.
Airline traffic won’t see a major boost until vaccines saturate populations enough to stamp down infection rates. Even then, it may take effort to get some people back on planes.
The coronavirus pandemic tore through in a tumultuous, unprecedented way — leaving carriers in a deep hole, along with a constellation of aerospace manufacturers, airports and leasing firms.
The nightmare year of 2020 brought the airline industry’s first decade of sustained profitability to a shuddering halt.
Dozens of airlines have disappeared or filed for bankruptcy since the pandemic began, according to Bloomberg. More are on life support, in danger of getting swallowed by stronger players.
In Germany, Deutsche Lufthansa AG is taking straight aim at holiday specialist Condor by adding routes to sunny spots like Zanzibar and Corfu. Condor, once a Lufthansa unit that in 2019 survived the failure of then-parent Thomas Cook, could make a tempting target.
However, natural consolidators like Lufthansa that accepted bailouts may be prevented from making purchases under terms of state aid packages.
In India, Tata Sons Ltd bought out struggling partner AirAsia Group Bhd’s stake in a local joint venture. State-owned Air India is another potential target, possibly through Vistara, Tata’s venture with Singapore Airlines Ltd, Air India’s buyer would “definitely need to make it a lot leaner,” Bloomberg Intelligence analyst James Teo says.
While airlines are seen turning cash positive within the year, the near-term picture remains bleak, IATA noted. Instead of a boost from the year-end holiday period, the industry got even more restrictions.
Governments tightened borders in a knee-jerk response to a virus mutation. Canada, the UK, Germany, Japan and others added testing to their Covid-19 measures without removing quarantine requirements.
“The already tepid recovery in air travel demand came to a full stop in November. That’s because governments responded to new outbreaks with even more severe travel restrictions and quarantine measures. This is clearly inefficient. Such measures increase hardship for millions. Vaccines offer the long-term solution.
“In the meantime, testing is the best way that we see to stop the spread of the virus and start the economic recovery. How much more anguish do people need to go through — job losses, mental stress — before governments will understand that?” said Alexandre de Juniac, IATA’s Director General and CEO.
2021 is shaping up to be a transition year for an enterprise that takes passengers on the equivalent of 208mn annual trips around the globe, Bloomberg says.
The road ahead will be bumpy, with progress toward a return to travel dependent on the pace of vaccine roll-outs, access to capital, government policies and the unpredictability of a virus- although deadly in some cases, is not yet fully understood!
*Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn
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