Airlines report a chilly summer with demand significantly below pre-COVID-19 levels, and ongoing restrictions on international travel restrictions are largely to blame. According to the International Air Travel Association (IATA) passenger demand for June 2021 showed only a very slight improvement in international and domestic air travel markets, compared to May.
- Total demand for air travel in June 2021 (measured in revenue passenger kilometers or RPKs) was down 60.1% compared to June 2019. That was a small improvement over the 62.9% decline recorded in May 2021 versus May 2019.
- International passenger demand in June was 80.9% below June 2019, an improvement from the 85.4% decline recorded in May 2021 versus two years ago. All regions except for Asia-Pacific contributed to the slightly higher demand.
- Total domestic demand was down 22.4% versus pre-crisis levels (June 2019), a slight gain over the 23.7% decline recorded in May 2021 versus the 2019 period. The performance across key domestic markets was mixed with Russia reporting robust expansion while China returned to negative territory.
OAG has projected that airlines may lose over US $8 billion in transatlantic revenues as global capacity shrinks week to week (26 July 2021).
Scheduled Airline Capacity by Region (Source: OAG)
“This week’s [26 July] 81.6 million is 1.3% down on last week’s numbers and remains 31% below the same week two years ago; this is normally the busiest week of the year, read into that what you will,” OAG’s John Grant writes.“Airlines..[dropped] another 2.6 million seats in the last seven days for July and to the end of October removing another 27.2 million seats; those are not the actions of an industry confident of a recovery. Between July and October 2019, the Transatlantic market alone generated revenues of some US$10.6 Billion, we will be lucky if one tenth of that is realised two years later. Since this is the time of year when airlines stash the cash for the winter season the lack of urgency in reopening this market must worry many major legacy airlines.”
Indeed airlines are worried, as IATA’s reporting reveals, and they are pushing for Travel Passes as a solution to re-open key international routes.
“We are seeing movement in the right direction, particularly in some key domestic markets. But the situation for international travel is nowhere near where we need to be. June should be the start of peak season, but airlines were carrying just 20% of 2019 levels. That’s not a recovery, it’s a continuing crisis caused by government inaction,” said Willie Walsh, IATA’s Director General.
The chill is global, even affecting markets where recovery has been stronger.
- In June industry-wide revenue passenger-kilometres (RPKs) fell by 60.1% compared with the pre-crisis June 2019 – an improvement on the 62.9% decline in May.
- Global domestic RPKs continued to recover, however performance was mixed across the key domestic markets. Russia, the US and Brazil showed positive RPK developments, but air traffic deteriorated in China and Australia. Int’l traffic also sustained its moderate recovery, with all regions but Asia Pacific showing better outcomes vs. May.
- Passenger’s willingness to travel remains strong but elevated international travel restrictions and rising COVID cases in some regions represent a risk to further air travel rebound.
- Asia-Pacific airlines’ June international traffic fell 94.6% compared to June 2019, unchanged from the 94.5% decline in May 2021 versus May 2019. The region had the steepest traffic declines for an eleventh consecutive month. Capacity dropped 86.7% and the load factor was down 48.3 percentage points to 33.1%, the lowest among regions.
- European carriers saw their June international traffic decline 77.4% versus June 2019, a gain from the 85.5% decrease in May compared to the same month in 2019. Capacity declined 67.3% and load factor fell 27.1 percentage points to 60.7%.
- Middle Eastern airlines posted a 79.4% demand drop in June compared to June 2019, improving from the 81.3% decrease in May, versus the same month in 2019. Capacity declined 65.3% and load factor deteriorated 31.1 percentage points to 45.3%.
- North American carriers’ June demand fell 69.6% compared to the 2019 period, improving from the 74.2% decline in May versus two years ago. Capacity sank 57.3%, and load factor dipped 25.3 percentage points to 62.6%.
- Latin American airlines saw a 69.4% drop in June traffic compared to the same month in 2019, improved over the 75.3% decline in May compared to May 2019. June capacity fell 64.6% and load factor dropped 11.3 percentage points to 72.7%, which was the highest load factor among the regions for the ninth consecutive month.
- African airlines’ traffic fell 68.2% in June versus the same month two years ago, an improvement from the 71.5% decline in May compared to May 2019. June capacity contracted 60.0% versus June 2019, and load factor declined 14.5 percentage points to 56.5%.
“With each passing day the hope of seeing a significant revival in international traffic during the Northern Hemisphere summer grows fainter,” Walsh said. “Many governments are not following the data or the science to restore the basic freedom of movement. Despite growing numbers of vaccinated people and improved testing capacity we are very close to losing another peak summer season on the important trans-Atlantic market. And the UK’s flip-flop to reinstate quarantine for vaccinated arrivals from France is the kind of policy development that destroys consumer confidence when it is most needed.”
“A risk-managed re-connecting of the world is what we need. Vaccinated travelers should have their freedom of movement returned. An efficient testing regime can sufficiently manage risks for those unable to be vaccinated. This is the underlying message in the latest WHO travel guidance.
“Some governments are moving in this direction. The UK, Singapore and Canada have indicated timelines to open their borders without quarantine for vaccinated travelers. The European Commission has recommended that its member states adopt travel protocols that are closely aligned with the WHO—including testing for unvaccinated travelers. Similar moves to re-open borders in line with the WHO guidance by US—leaders in vaccinating their populations—would give critical impetus to demonstrating that we can live and travel while managing the risks of COVID-19,” said Walsh.
Travel Pass Advances
To support a broader global lifting of air travel restrictions, IATA continues to advance with its Travel Pass digital health passport program.
The association has launched a self-registration portal to make it easier for
COVID-19 testing labs to join the IATA Travel Pass Lab Network, a list of eligible lab locations around the globe where travelers can more easily arrange a COVID-19 test prior to traveling by air. Labs in the IATA Lab Network confirm they eligibility criteria during self-registration, then IATA validates the information provided and contact labs directly to complete their registration.
“COVID-19 testing will be critical to a prolonged recovery to international travel for the foreseeable future. One aim of IATA Travel Pass is to make it as easy as possible for travelers to find eligible labs that meet the specific requirements of their journeys. Already IATA Travel Pass has an extensive network of labs which is rapidly expanding as more airlines use the IATA Travel Pass. The IATA Lab Network Self Registration Portal will make it easier for more labs to join so that we are ready to reliably meet the requirements of governments as and more people return to the skies,” said Nick Careen, IATA’s Senior Vice President for Operations, Safety and Security.
The IATA Lab Network is free for labs to join. When passengers use a lab on the Travel Pass Lab network for COVID-19 testing prior to travel, their results are securely uploaded in IATA Travel Pass. This information is then checked against the IATA Timatic global registry of national health and entry requirements, to confirm an “OK to Travel” status on the app.
IATA touts Travel Pass as “more secure and efficient than current paper processes used to manage health requirements, crucial for the scalable restart of aviation.” Over 70 airlines are either trialling or committed to testing IATA Travel Pass, and the trials span 151 routes across all continents of the world.
Collins Aerospace also announced that it will support IATA’s Travel Pass.
Collins Aerospace will help integrate IATA’s Travel Pass platform into airlines’ passenger management systems using the company’s TransActionTM solution, which allows passenger data to be safely and securely exchanged between airlines and the IATA Travel Pass mobile app. TransAction is already in use by airlines around the world to share passenger travel information.
“More than half of the world’s borders have some kind of travel restriction in place, but we see the deployment of vaccinations and enhanced testing measures as positive steps toward restoring passenger confidence in airline travel,” said LeAnn Ridgeway, vice president and general manager of Information Management Services and head of Collins Aerospace’s Redefining Air Travel task force. “With the use of Collins Aerospace’s technology, Travel Pass will verify the secure flow of necessary information to give governments the confidence to reopen their borders.”
“The industry restart is becoming a reality supported by IATA Travel Pass,” IATA’s Careen said of the announcement. “Collins has embraced the solution and is helping airlines to accelerate its adoption by providing a tool to seamlessly and securely integrate airlines’ passenger management systems with Travel Pass to enable travelers to upload their flight details into the app,”
No doubt, the COVID-19 challenge to aviation operations endures and the lingering negative impact on airlines from international routes suppressed by government travel restrictions is unsurprising. After all, one of the key benefits of aviation as a form of transport is a more efficient way to travel overseas and overseas visitors can help boost domestic demand while at their travel destination.”
More than half-way through the second year of this pandemic, we still cannot underestimate the threat COVID-19 poses to aviation. Even with vaccines, it seems, the cure will take time and test our resilience.