The International Air Transport Association (IATA) has released an updated global passenger forecast predicting that air travel will not return to pre-COVID-19 levels until 2024, a year later than previously projected.
Passenger traffic worldwide in June 2020 fell by 86.5 per cent compared to the same period last year. This compares with a 91.0 per cent contraction in May.
IATA says that the more pessimistic recovery outlook is based on a number of recent trends:
- Slow virus containment in the US and developing economies
- Reduced corporate travel
- Weak consumer confidence
In particular, it says that “corporate travel budgets are expected to be very constrained as companies continue to be under financial pressure even as the economy improves.” It also says that surveys suggest “video conferencing appears to have made significant inroads as a substitute for in-person meetings.”
There is some “pent-up demand exists for VFR (visiting friends and relatives) and leisure travel” but “consumer confidence is weak in the face of concerns over job security and rising unemployment, as well as risks of catching COVID-19. Some 55 per cent of respondents to IATA’s June passenger survey don’t plan to travel in 2020”. IATA says.
“Passenger traffic hit bottom in April, but the strength of the upturn has been very weak,” said Alexandre de Juniac, IATA’s Director General and CEO.
“What improvement we have seen has been domestic flying. International markets remain largely closed. Consumer confidence is depressed and not helped by the UK’s weekend decision to impose a blanket quarantine on all travellers returning from Spain. And 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.”
Passenger numbers are expected to rise 62 per cent in 2021 off the depressed 2020 base, but still will be down almost 30 per cent compared to 2019. A full recovery to 2019 levels is not expected until 2023, one year later than previously forecast.