New forecast says air travel won't hit pre-pandemic levels until 2024
Business and leisure travel will both face several stumbling blocks in the long road to recovery.
The airline industry pushed back its hopes of a rebound in traffic levels to pre-pandemic levels amid disappointing passenger numbers since lockdowns lifted.
A full recovery is unlikely before 2024, a year later than it recently predicted, the International Air Transport Association said on a call Tuesday. Traffic is not growing as fast as airlines are adding capacity, the industry’s main trade group added.
“The demand and the revenues are not rising as quickly as expected so airlines are still burning cash,” IATA chief economist Brian Pearce said. “The situation is deterioriating relative to what we had expected.”
Airlines have been battered by the restrictions brought in to contain the coronavirus. Carriers had been pinning their hopes on catching the tail-end of the profitable summer season but disruptions continue amid viral flare-ups in countries like France and Spain.
The restart of travel could be the most difficult time for airlines as they begin to incur higher costs when there are insufficient passenger numbers to generate profit. The majority of airlines likely won’t return to positive cash flow until 2021, Pearce said.
Business travel is not yet recovering in line with a rebound in industry confidence, said Pearce, suggesting that behaviors have changed.
There will likely be less corporate travel to company offices in the future, he said, with consequences for business models which often depend on high-paying executive fliers to cover the shortfall on economy tickets.
Although the level of traffic showed an improvement in June from prior months, it was still 86.5% down from a year earlier.
The leisure travel market is not likely to recover until consumer confidence is restored, according to the airline lobby group. The U.K.’s decision to reintroduce quarantine for passengers returning from Spain is “very significant,” said Pearce.
A renewed increase in cases has been seen in countries including Hong Kong, Germany and Spain. IATA chief Alexandre de Juniac said he favors virus tests as a means of easing restrictions.
This article is published under license from Bloomberg Media: the original article can be viewed here
Hi Guest, join in the discussion on New forecast says air travel won't hit pre-pandemic levels until 2024
24 Aug 2011
Total posts 1190
Sadly, no one knows. This could be wildly optimistic or wildly pessimistic.
If a vaccine becomes widely available within 18 months, recovery could be quicker and we could be above 50% of 2019 demand by Christmas 2021. Absent a vaccine and the ability to acquire international travel insurance, international travel could stay disastrously depressed for years. Of course, this would be a terrible outcome and would place the viability of just about every international airline and hotel chain into question.
Air New Zealand - Airpoints
21 Jan 2016
Total posts 198
I agree with you. I am not sure why there is so much hope around a 'vaccine' that will bring everything back to normal. There is no guarantee that a vaccine will work considering the SARS-cov-2 virus is mutating to be a more effective and more disruptive. This mutation could be behind the so call 2nd wave of COVID19 that is gaining momentum.