The recovery in the demand raises alarms worldwide

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The recovery in the demand raises alarms worldwide
Wed December 09, 2020

International passenger demand in October was down 87.8% compared to October 2019, virtually unchanged from the 88.0% year-on-year decline in September


The International Air Transport Association (IATA) announced that the recovery in passenger demand remained disappointingly slow in October.

Total demand (measured in revenue passenger-kilometers or RPK) was down 70.6% compared to October 2019. This was only a modest improvement from the 72.2% year-on-year decrease recorded in September. Capacity was down 59.9% compared to the previous year and load factor fell 21.8 percentage points to 60.2%.

International passenger demand in October was down 87.8% compared to October 2019, virtually unchanged from the 88.0% year-on-year decline in September. Capacity was 76.9% below year-earlier levels, and load factor was down 38.3 percentage points to 42.9%.

Domestic demand drove what little recovery there was, and October's domestic traffic fell 40.8% compared to the previous year. This improved from a 43.0% year-on-year decline in September. Capacity was 29.7% below 2019 levels and load factor was down 13.2 percentage points to 70.4%.

“New COVID-19 outbreaks and governments' continued reliance on heavy-handed quarantines resulted in another catastrophic month for air travel demand. While the pace of recovery is faster in some regions than others, the overall picture for international travel is bleak. This uneven recovery is most pronounced in domestic markets, with China's domestic market almost rebounding, while most others remain deeply depressed, ”said Alexandre de Juniac, IATA Director General and CEO.

International passenger markets

Asia-Pacific airlines' October traffic plunged 95.6% compared to the prior year period, which was unchanged from September. The region continued to suffer the biggest drops in traffic. Capacity plummeted 88.5% and load factor fell 49.4 percentage points to 30.3%, the lowest among regions.

October demand from European airlines sank 83.0% compared to a year ago, worsened from an 81.2% drop in September. For the second month in a row, Europe was the only region to experience a decline in traffic. Capacity contracted 70.4% and load factor fell 36.7 percentage points to 49.5%.

Middle East airlines experienced a traffic drop of 86.7% in October, an improvement from a drop in demand of 89.3% in September. Capacity was down 73.6% and load factor was down 36.6 percentage points to 37.0%.

North American airline traffic plummeted 88.2% in October, a slight improvement from a 91.0% drop in September. Capacity plummeted 73.1% and load factor fell 46.2 percentage points to 36.2%.

Latin American airlines experienced a drop in demand of 86.0% in October, compared to the same month last year. The region showed the biggest improvement in September, when year-on-year demand fell 92.3%. October capacity was reduced by 80.3% and load factor was reduced by 23.5 percentage points to 57.7%, which was the highest among the regions.

African airline traffic plunged 78.6% in October, improved from an 84.9% drop in September and the best performance among regions. Capacity contracted 67.5% and load factor fell 23.8 percentage points to 45.5%.

Domestic passenger markets

China's domestic traffic was down just 1.4% in October compared to October a year ago. The national economy was close to normal, and low fares and so-called "all you can fly" deals drove demand.

Russia's domestic traffic fell negative again in October, down 10% after two months of growth. New cases of COVID have taken a toll on traveler confidence, despite few domestic travel restrictions.

“This crisis is relentless. Our latest economic outlook is for airlines to lose $ 118.5 billion this year, or $ 66 for every passenger carried. Assuming the borders are reopened in mid-2021, the industry will 'only' lose $ 38.7 billion in 2021. Now is the time for governments to step up. The $ 173 billion of support provided to date has allowed the industry to survive, but more is needed to carry the industry through next summer. IATA has identified a variety of market stimulation options that will support the viability of air routes while encouraging people to travel. Without aviation's contribution of $ 3.5 trillion to global GDP, there can be no broader economic recovery, ”de Juniac said.

 

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