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Resurgent Virus Dims Airlines’ Earlier Hopes From This Summer

Madhu Unnikrishnan

November 4th, 2020

The peak summer season in the Northern Hemisphere wrapped up with some hard truths for airlines: There will be no miraculous recovery in demand. September’s numbers from the International Air Transport Association (IATA) show only modest improvements with dark clouds in the offing.

Global passenger traffic was down 73% year-over-year in September. That’s a modest improvement over August, which was down 75%, but not the recovery airlines had hoped for. And August is the last month of the airlines’ peak travel season.

International traffic fell by 89% in September, compared with 2019. In most regions of the world, the decline was more than 90%, but traffic in Europe was stronger than in other regions. This is at risk now that Europe is entering another wave of the pandemic. Quarantines, particularly in Asia, are crimping demand there. IATA warns that demand could fall further if the global economic recovery is put at risk by the pandemic’s resurgence in the winter months.

Domestic travel declined by fair less, down 43% from September 2019, IATA reports. Domestic U.S. was down by 14%, while traffic in China was down just under 3%, on 3% more capacity. Traffic in Russia actually grew, if modestly, by about 3%. Capacity worldwide remains about two-thirds of what it was in 2019.

Cargo remains a bright spot, even though belly-hold capacity remains constrained due to the drastically reduced number international widebody flights. Cargo volumes in North America have returned to pre-crisis levels, fueled by surging e-commerce volumes, particularly in the U.S., IATA said Southwest Chief Commercial Officer Andrew Watterson confirmed this, saying in an interview, “Cargo has held up very well for us.”

“We have hit a wall in the industry’s recovery,” IATA Director General Alexandre de Juniac said. “A resurgence in COVID-19 outbreaks —particularly in Europe and the U.S. — combined with governments’ reliance on the blunt instrument of quarantine in the absence of globally aligned testing regimes, has halted momentum toward re-opening borders to travel.” 

Madhu Unnikrishnan

November 4th, 2020

Photo credit:  Lufthansa

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