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Aviation industry remains at depressed levels for the month of September -IATA

“We have hit a wall in the industry’s recovery,” said Alexandre de Juniac, International Air Transport Association (IATA) director general and CEO during a media call last November 4. It has been reported that passenger air travel demand remain depressed in the month of September amid the Covid-19 pandemic.

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According to the IATA, Total demand (measured in revenue passenger kilometres or RPKs) was 72.8 percent below September 2019 levels and only slightly improved over the 75.2 percent year-to-year decline recorded in August. Capacity was down 63 percent compared to a year ago and load factor fell 21.8 percentage points to 60.1 percent.

"International passenger demand in September plunged 88.8 percent compared to September 2019, basically unchanged from the 88.5 percent decline recorded in August. Capacity plummeted 78.9 percent, and load factor withered 38.2 percentage points to 43.5 percent. Domestic demand in September was down 43.3 percent compared to the previous year, improved from a 50.7 percent decline in August. Compared to 2019, capacity fell 33.3 percent and the load factor dropped 12.4 percentage points to 69.9 percent," according to a report from Asian Aviation.

IATA

Resurgence of Covid-19 cases in Europe and US

The momentum to reopen borders to air travel has somehow been halted after a resurgence in the number of new cases of Covid-19 in Europe and the United States. Another factor that continues to affect air travel demand is the reliance of some governments on quarantine procedures in the absence of globally aligned testing regimens.

IATA

Alexandre de Juniac said, “Last week we provided analysis showing that the airline industry cannot slash costs fast enough to compensate for the collapse in passenger demand brought about by COVID-19 and government border closures and quarantines.

“Some 4.8 million aviation-sector jobs are imperilled, as are a total of 46 million people in the broader economy whose jobs are supported by aviation. To avoid this economic catastrophe, governments need to align on testing as a way to open borders and enable travel without quarantine; and provide further relief measures to sustain the industry through the dark winter ahead. A broader economic recovery is only possible through the connectivity provided by aviation."

Asia-Pacific region

Air traffic in the Asia-Pacific region sank 95.8 percent compared to the year-ago period for the month of September 2020, not much difference from a 96.2 percent drop in August. The region continued to suffer from the steepest fall in traffic as flight restrictions have remained stringent with little re-opening of borders. Total capacity has also plummeted 89.6 percent and load factor shrank 46.8 percentage points to 31.7 percent, the lowest among airlines in other regions like Europe, Middle-East, North America, Latin America, and Africa.

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Cargo market strengthening

The IATA data however showed that global cargo operations are strengthening, however, numbers are still very low compared to the 2019 numbers. Global cargo demand which is measured in cargo tonne-kilometres (CTKs), was 8 percent below previous-year levels in September (-9.9 percent for international operations). This is still an improvement from the 12.1 percent year-on-year drop recorded in August of this year.

According to de Juniac, "air cargo volumes are down on 2019, but they are a world apart from the extreme difficulties in the passenger business.

“For air cargo, 92 percent of the business is still there, whereas about 90 percent of international passenger traffic has disappeared. Favourable indicators for the peak year-end season will support the continued recovery in demand. Already North American and African carriers are reporting demand gains on 2019. The challenge continues to be on capacity. As carriers adjust schedules to reflect falling passenger demand amid the resurgence of COVID-19, valuable belly capacity will be lost when it is needed the most," said de Juniac.

Airlines in the Asia-Pacific region saw international air cargo demand fall by 14.6 percent in September 2020 compared to the same month in 2019. This was also an improvement from the 16.4 percent fall in August 2020. Demand on routes between Asia - North America and Asia - Africa were of the strongest. International capacity remained constrained in the region, down 32 percent, despite airlines adding more capacity on many routes.

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