The International Air Transport Association (IATA) called for governments to work with the industry on confidence-boosting measures in the face of an anticipated slow recovery in demand for air travel.
“Passenger confidence will suffer a double whammy even after the pandemic is contained — hit by personal economic concerns in the face of a looming recession on top of lingering concerns about the safety of travel,” said Alexandre de Juniac, IATA’s director general and CEO. “Governments and industry must be quick and coordinated with confidence-boosting measures.”
An IATA-commissioned survey of recent travelers found that 60 percent anticipate a return to travel within one to two months of containment of the COVID-19 pandemic, but 40 percent indicate that they could wait six months or more. Finances are equally important, with 69 percent of respondents saying they could delay a return to travel until their personal financial situation stabilizes.
IATA said early indications of this cautious return-to-travel behavior are seen in the domestic markets of China and Australia, where new coronavirus infection rates have fallen to very low levels. In China, domestic demand began to recover when the rate of new COVID-19 infections in China fell into single digits and rapidly headed towards zero (measured by new infections as a percentage of the seven-day moving average of total COVID-19 cases). While there was an early upswing from mid-February into the first week of March, the number of domestic flights plateaued at just over 40 percent of pre-COVID-19 levels. Actual demand is expected to be significantly weaker as load factors on these flights are reported to be low.
In Australia, domestic demand continued to deteriorate even after the rate of new infections fell into single digits which triggered an initial recovery in the Chinese domestic market. In fact, there is still no sign of a recovery (total domestic flights are at 10 percent of pre-COVID-19 levels) even as new infections nears zero, IATA reported.
Domestic market behavior is a critical indicator as the post-pandemic recovery is expected to be led by domestic travel, followed by regional and then intercontinental as governments progressively remove restrictions.
“In some economies, the spread of COVID-19 has slowed to the point where governments are planning to lift the most severe elements of social distancing restrictions. But an immediate rebound from the catastrophic fall in passenger demand appears unlikely,” said de Juniac. “People still want to travel. But they are telling us that they want clarity on the economic situation and will likely wait for at least a few months after any ‘all clear’ before returning to the skies. As countries lift restrictions, confidence boosting measures will be critical to re-start travel and stimulate economies.”
