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2020 A calamitous year for airlines

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MONTREAL, Canada, 27 January 2021: International passenger traffic suffered a dramatic dip of 60% in 2020, bringing air travel totals back to 2003 levels says ICAO in its latest economic impact analysis of Covid-19.

The UN agency that oversees civil aviation reported seat capacity fell by 50% last year, and passenger totals dropped 60% resulting in just 1.8 billion passengers taking to the air during the first year of the pandemic, compared to 4.5 billion in 2019.

ICAO estimated that airline financial losses reached USD370 billion with airports and air navigation services providers (ANSPs) losing a further USD115 billion and USD13 billion, respectively.

The pandemic plunge in air travel demand began in January of 2020 but was limited to only a few countries. As the virus continued its global spread; however, air transport activities came to a virtual standstill by the end of March.

With the wide-scale lockdown measures, border closures, and travel restrictions being set out around the world, by April the overall number of passengers had fallen 92%  from 2019 levels, an average of the 98% drop-off seen in international traffic and 87%t fall in domestic air travel.

Following a low-point in April passenger traffic saw a moderate rebound during the summer travel period. That upward trend was short-lived, however, stalling and then taking a turn for the worse in September when the second wave of infection in many regions prompted the reintroduction of restrictive measures.

“Sectoral recovery became more vulnerable and volatile again during the last four months of 2020, indicating an overall double-dip recession for the yearn: ICAO concluded in the annual report.

Grim outlook ahead

Paralyzed revenue streams resulting from the plunge in air traffic has led to severe liquidity strains across the aviation value chain, placing the industry’s financial viability in question and threatening millions of jobs around the world.

Cascading impacts have also been severe across tourism markets globally, given that over 50% t of international tourists formerly used air travel to reach their destinations.

The global USD370 billion drop in gross airline passenger operating revenues represented losses of USD120 billion in the Asia/Pacific, USD100 billion in Europe, and USD88 billion in North America, followed by USD26 billion, USD22 billion and USD14 billion in Latin America and the Caribbean, the Middle East and Africa, respectively.

ICAO said the near-term outlook is for prolonged depressed demand, with downside risks to global air travel recovery predominating in the first quarter of 2021, and likely to be subject to further deterioration.

It expects any improvement in the global picture only by the second quarter of 2021, though this will still be subject to the effectiveness of pandemic management and vaccination rollout.

In the most optimistic scenario, by June of 2021 passenger numbers will be expected to recover to 71% of their 2019 levels (53% for international and 84% for domestic). A more pessimistic scenario foresees only a 49% recovery (26% for international and 66% for domestic).

For more information with graphs see
ICAO Economic Impact Analysis of COVID-19 on Civil Aviation

About ICAO
A specialized agency of the United Nations, ICAO was created by governments in 1944 to support their diplomacy on international air transport matters. Since that time, countries have adopted over 12,000 standards and practices through ICAO, which help to align their national regulations relevant to aviation safety, security, efficiency, capacity and environmental protection. ICAO forums also provide opportunities for advocacy to be shared with government decision-makers by industry groups, civil society NGOs, and other officially-recognized air transport stakeholders.

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