Airline CFOs are feeling moderately optimistic for the future as the global vaccine roll-out continues.
The International Air Transport Association (IATA) has published its most recent (July) airline CFO confidence survey.
- 72% of surveyed carriers reported smaller losses as the pandemic got better under control. Significant cost reductions and moderate gains in passenger demand contributed to the improvement this quarter. On the other hand, 28% of the sample reported that COVID continues to have a major impact on their operations.
- 73% of them expect profitability to improve in the year ahead since they anticipate passenger traffic to recover further with the support of vaccine rollout. They also expect that passenger confidence will pick up and concerns about safety of air travel will recede. However, 25% of the respondents expect no change or deterioration in net losses due to the risk that new COVID waves and resulting lockdowns weigh on air travel recovery.
- 81% of the survey sample reported an increase in passenger volumes in Q2 2021 compared with Q2 last year when passenger traffic was de facto non-existent amidst large-scale travel bans and sharp capacity cuts.
- 89% of the respondents anticipate that demand would recover with the reopening of markets. The remaining 11% expect no change in the current air traffic volumes due to new COVID waves and uncertainty about vaccine progress.
- 48% of respondents expect passenger yields to increase in the next twelve months as air travel begins to slowly recover and airlines start to adjust their fares to this demand uptick. 37% expect yields to be stable and 15% think they will decrease due to tougher competition among airlines for the few travellers available in the market.
- 52% expect air travel demand for their airlines to recover in 2023, which is consistent with IATA’s global passenger forecast. One third of surveyed carriers is more pessimistic, expecting the demand to reach the pre-crisis level in 2024 or later. The remaining 15% believe that demand recovery will take place already next year, for their airlines. As for the restart of long-haul traffic, 75% of the respondents anticipate it will happen in 2022 or later.
- While in the first quarter, the majority of the respondents (42%) expected Asia Pacific to lead the recovery to 2019 levels, the latest survey version shows North America to be the main front-runner. This is followed at somedistance by Europe and Asia Pacific(21% of respondents each). Africa switched place with Europe to become the region with the longest expected air traffic recovery based on July survey.
Proof of Vaccine Advances with IATA Travel Pass
We’re moving a few steps closer to simplifying the proof of vaccination for air travel with new EU and UK vaccine certificate integrations to the IATA Travel Pass platform.
“Travelers holding an EU Digital COVID Certificate (DCC) or UK NHS COVID Pass can now access accurate COVID-19 travel information for their journey, create an electronic version of their passport and import their vaccination certificate in one place,” the International Air Transport Association (IATA) explained in its announcement. The digital certification can be shared through the Travel Pass with airlines and border control authorities confirming that the vaccination certificate is genuine and belongs to the traveler.
“COVID-19 vaccination certificates are becoming a widespread requirement for international travel. Handling the European and UK certificates through IATA Travel Pass is an important step forward, providing convenience for travelers, authenticity for governments and efficiency for airlines,” said Nick Careen, IATA’s Senior Vice President for Operations Safety and Security.
Harmonization of Digital Vaccine Standards Still Needed
IATA repeated its call for widespread harmonization of digital vaccine standards and recognized the EU Commission for developing the EU DCC system “in record time”, and standardizing digital vaccine certificates across Europe.
The airline association urged the World Health Organization (WHO) to advance in its work developing a global digital vaccine standard.
“The absence of a global standard makes it much harder for airlines, border authorities and governments to recognize and verify a traveler’s digital vaccination certificate. The industry is working around this by developing solutions that can recognize and verify certificates from individual countries. But this is a slow process that is hampering the restart of international travel,” Careen said.
“As more states roll out their vaccination programs, many are urgently looking to implement technical solutions to provide vaccine certification for their citizens when they travel. In the absence of a WHO standard, IATA urges them to look closely at the EU DCC as a proven solution that meets WHO guidance and can help to reconnect the world.”
Kingdom of Saudi Arabia Accepts IATA Travel Pass
IATA also announced that the General Authority of Civil Aviation (GACA) of the Kingdom of Saudi Arabia will accept IATA Travel Pass, to confirm pre-departure COVID-19 test results for departing and arriving passengers, starting at the end of September. This acceptance will eventually also extend to vaccine certification, though no date is set yet.
Travellers to and from the Kingdom of Saudi Arabia can choose between the IATA Travel Pass or Tawakkalna, the country’s national health app, owned and developed by Saudi Data and Artificial Intelligence Authority (SDAIA). Travellers to Saudi Arabia intending to use the IATA Travel Pass should check with the airline they are travelling with for eligibility to use the IATA Travel Pass.
Saudi Arabian Airlines has been a trial partner in the development of the IATA Travel Pass.
“Our collaboration with the Kingdom of Saudi Arabia, GACA, Tawakkalna and Saudi Arabian Airlines demonstrates a shared commitment to restore international air travel safely. The Kingdom of Saudi Arabia’s acceptance of IATA Travel Pass will demonstrate how digital solutions can effectively manage both COVID-19 vaccine and test certificates. The trust that the KSA has placed in IATA Travel Pass is an example for other governments to follow,” said Willie Walsh, IATA’s Director General.
“GACA is committed to supporting all stakeholders to ease and facilitate air travel in an efficient and effective way by adopting best international practices while taking full consideration of ICAO’s CART guidance by our wider country’s authorities in the decision-making processes on national recovery planning. We are committed to drive the adoption of digital health certificates and restore international air travel. GACA and SDAIA have facilitated to work alongside IATA and Tawakkalna, in building a robust framework to help facilitate the journey of citizens, visitors and guests of the Kingdom of Saudi Arabia. Further, GACA appreciates the efforts of all stakeholders in the integration with IATA Travel Pass including Timatic, health travel requirements, and Saudi’s digital platform ‘Health Pass’ by Tawakkalna, which will help to create a common vision for the future of air travel and technologies,” said H.E Abdulaziz A. Al Duailej, GACA’s Director General.
More than 80 airlines have announced trials of the IATA Travel Pass and the app is accepted for entry by a number of governments including Singapore and Panama.