Global passenger demand slumps 53% amid Covid-19 pandemic

'The industry is in free fall and we have not hit bottom,' Alexandre de Juniac, Iata’s director general says

Cathay Pacific jetliners parked in Hong Kong International Airport. EPA

Global passenger demand for air travel more than halved in March, the biggest slump in more than a decade, due to border closures and government enforced restrictions due to the coronavirus pandemic, the International Air Transport Association said.

Passenger demand, measured in total revenue passenger kilometres, or RPKs, fell 53 per cent from the year earlier period, Iata said in its latest report on Thursday.

In seasonally adjusted terms, global passenger volumes slumped to lowest level in 14 years, while March passenger capacity - available seat kilometres - fell by 36.2 per cent. Load factor dropped 21.4 percentage points to 60.6 per cent year-on-year, it said.

“March was a disastrous month for aviation,” Alexandre de Juniac, Iata’s director general and chief executive, said. “Airlines progressively felt the growing impact of the Covid-19 related border closings and restrictions on mobility, including in domestic markets.”

Conditions have further deteriorated in April and most signs point to a slow recovery, he added.

The coronavirus pandemic has brought the global travel and tourism industry to a halt and the global economy is now in a recession, expected to be the deepest since the Great Depression of the 1930s, according to the International Monetary Fund.

The global economy is set to contract 3 per cent contraction this year, according to the fund.

About 25 million jobs in the industry are at risk worldwide and airlines worldwide are forecast to lose $314 billion (Dh1.15bn) in passenger revenue this year due to the pandemic, according to Iata's latest estimates.

“The industry is in free fall and we have not hit [the] bottom [yet]. But there will come a time, soon, I hope, when authorities will be ready to begin easing restrictions on mobility and opening borders,” Mr de Juniac said.

“It is imperative that governments work with industry now to prepare for that day," he added. "It is the only way to ensure that we have measures in place to keep passengers safe during travel and reassure governments that aviation will not be a vector in the spread of the disease.”

March international passenger demand shrank 55.8 per cent year-on-year, significantly worse than 10.3 per cent annual decline in February, according to Iata. All regions recorded a double-digit percentage traffic declines, as capacity tumbled 42.8 per cent and the average load factor plunged 18.4 percentage points to 62.5 per cent.

Airlines in the Asia-Pacific region saw the biggest drop in March traffic, registering a 65.5 per cent decline from a year-earlier and double February's 30.7 per cent drop. Capacity in the region fell 51.4 per cent and load factor collapsed to 57.1 per cent, Iata said.

European carriers saw a demand drop of 54.3 per cent. Capacity dropped 42.9 per cent and load factor sank to 67.6 per cent, which was the highest among all regions in March. Middle Eastern airlines posted a 45.9 per cent year-on-year slide in demand, reversing a 1.6 per cent rise in February.

Carriers in North American registered a 53.7 per cent drop in traffic, while Latin American airlines recorded a 45.9 per cent decline. African airlines’ traffic fell 42.8 per cent for the same period.

Demand for domestic travel globally also shrank 47.8 per cent in March, which compares to 21.3 per cent year-to-year decline in February. Capacity fell 24.5 per cent and the load factor plunged 26 percentage points to 58.1 per cent in domestic markets, according to Iata.