Airline Weekly

Daily Airline News

S&P: Air Travel Demand Even Worse Than Expected

Madhu Unnikrishnan
August 12th, 2020 at 1:31 PM EDT

Photo credit:  Flickr / Ikarasawa

After a flurry of second-quarter results showed that the airline industry is worse off than we thought, out comes a new report that makes the bad news even more grim. S&P Global now expects air travel demand to be down 60-70% this year compared with last year. This is a downgrade from S&P’s previous forecast of demand this year being down 50-55%, compared with 2019.

And demand in 2021 is expected 30-40% compared with 2019. S&P does not expect demand to recover until 2024, which tracks with IATA’s forecast.

International demand, measured in RPKs, collapsed in April and May, and improved only slightly in June (to -87%, compared with 2019). Ever-shifting travel restrictions are to blame, S&P says, and corporate demand has all but evaporated, with no recovery in sight. Leisure demand is showing signs of life, as people take their summer vacations and visit friends and family.

Domestic demand is faring better but still was down almost 70% in June. Throughput at Transportation Security Administration (TSA) checkpoints in the U.S. has been inching back up in the summer, fueled by domestic leisure travel. Although throughput has topped 700,000 daily passengers on several days recently, it’s still a fraction of what it was. Throughput on a typical August day last year topped 2.5 million daily passengers.

Government aid has helped airlines survive, S&P notes, in every region except Latin America, where governments have not opened their checkbooks. Airlines also have not shelled out as much in ticket refunds as had been expected. The industry also has been right-sizing itself for what it expects will be a much smaller near-term future.

And how does that near term future look to S&P? Compared with 2019 levels, demand is expected to be down 15-20% in 2022 and 10-15% in 2023. Recovery worldwide could be uneven, dictated by the pandemic and the availability of effective vaccines or therapeutics.


Already a member?

Already a member?

Up Next

Latin America

Mexico’s Viva Aerobus Announces Major U.S. Expansion

Viva Aerobus, a low-cost airline in Mexico, has announced six new routes to the U.S. from Monterrey, its busiest airport. The move follows the long-anticipated U.S. government decision to upgrade…

North America

Breeze Sees Softer Bookings as Airline Growth Outpaces Fall Travel Demand

U.S. airlines have scheduled too many flights this fall for the number of travelers, Breeze Airways founder and CEO David Neeleman said. This is pushing down airfares just as fuel…


Hawaiian Airlines Defends Tokyo Haneda Flight Rights as United Seeks to Expand

Hawaiian Airlines plans to resume all of its flights to Tokyo Haneda this winter that were suspended during the pandemic, CEO Peter Ingram said. The move comes as United Airlines…


U.S. Airlines Expect Further Easing of China Flight Limits this Winter

U.S. and Chinese airlines are eager to resume nonstop flights between the two countries following a diplomatic accord in August doubling the number allowed. They have proposed 63 weekly flights…


KLM CEO Rebukes Dutch Proposal to Tax Transit Passengers at Schiphol

KLM CEO Marjan Rintel offered a firm rebuke of a proposal in the Netherlands' legislature to tax transfer passengers at the airline's hub, Amsterdam's Schiphol airport.

Exit mobile version