Wednesday,  October 28, 2020  9:39 am

Near-term outlook for aviation industry has "gotten darker," says IATA CEO

  • Air
  •   09-29-2020  1:53 pm
  •   Pax Global Media
Near-term outlook for aviation industry has "gotten darker," says IATA CEO
Alexandre de Juniac, Director General and CEO of the International Air Transport Association (IATA). (Supplied)
Pax Global Media

The near-term outlook for the aviation industry has "gotten darker," said Alexandre de Juniac, director general and CEO of the International Air Transport Association (IATA), in remarks made at an IATA press briefing on Tuesday (Sept. 29). 

This is "something I would not have believed possible just a few months ago," stated de Juniac. 

The CEO remarked how the peak summer travel season, in normal times, would usually provide airlines with a "cash cushion" to help weather the slower autumn and winter seasons.

"But this year the industry is heading into the slow season in the worst financial position in its history," he said. 

A "dismal end" to summer

The remarks come as IATA downgraded its traffic forecast for 2020 to reflect a weaker-than-expected recovery, as evidenced by what it calls a "dismal end to the summer travel season" in the Northern Hemisphere. 

IATA now expects full-year 2020 traffic to be down 66% compared to 2019. The previous estimate was for a 63% decline.  

August passenger demand continued to be hugely depressed against normal levels, with revenue passenger kilometers (RPKs) down 75.3% compared to August 2019, IATA reports. 

In North America, airline traffic was down 92.4% in August. Capacity fell 82.6%, and load factor dropped 49.9 percentage points to 38.5%.

“This year, airlines have no such protection. Absent additional government relief measures and a reopening of borders, hundreds of thousands of airline jobs will disappear," said de Juniac. 

"Much to be gained" by reopening borders

de Juniac highlighted two points: 

  1. This is no time for governments to walk away. The industry is grateful to those governments that have already provided support, but new job-saving measures are needed - including financial measures that do not add to overstressed balance sheets, he said. 
  2. For the good of aviation and the global economy, "we need to reopen borders and remove travel killing quarantines. The ability to travel is absolutely central to doing business in our highly integrated global economy; and globalization has lifted more than a billion people from poverty since 1990," he said. 

He pointed out how, on Monday (Sept. 28), the World Bank issued a report for East Asia and the Pacific that estimates that there will be 33 and 38 million more people living in poverty in that region alone, this year than in their pre-COVID scenario. 

"And job losses in transport and hospitality industries are among the most affected in that region," he said. 

de Juniac said there is "much to be gained" by re-opening borders. 

"...every day that we delay in re-connecting the world people are getting poorer and tens of millions of jobs that depend on aviation are at risk of going away," he said. 

He added how systematic pre-departure COVID-19 testing should give governments the confidence they need to reopen borders and passengers the added confidence knowing they won't get infected while travelling. 

He did, however, note the progress that was being made with pre-departure testing being put in place on some routes and at some airports. 

Notably, in the past days, there have been announcements by airlines for testing Hawaii-bound travellers from continental U.S. 

"These and other airline-led testing programs will give us valuable experience while the numbers of travellers are still low, so that we can be ready as demand ramps up," he said. 

He noted the findings from IATA's recent passenger survey, which shows overwhelming support for testing;

  • 84% agreed that testing should be required of all travellers
  • 88% agreed that they are willing to undergo testing as part of the travel process

A further result reveals that 61% of those surveyed in the 11 markets covered believed that COVID-19 is sufficiently controlled in their country to enable borders to re-open. 

"We are ready to work with governments worldwide to make this happen," said de Juniac. "Establishing systematic pre-departure testing is the key to unlocking global connectivity, stimulating battered economies, and giving hope to the 10% of the global workforce whose livelihoods depend on travel and tourism." 


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