‘COVID-19 plunges airlines into biggest crisis ever’

• Passenger traffic falls by 14.1 per cent

The International Air Transport Association (IATA) has described the coronavirus disease as the biggest crisis ever in aviation. IATA said this as it announced global passenger traffic data for February 2020 showing that demand fell 14.1 per cent compared to February 2019.

This was the steepest decline in traffic since 9.11 and reflected collapsing domestic travel in China and sharply falling international demand to/from and within the Asia-Pacific region, owing to the spreading COVID-19 virus and government-imposed travel restrictions.

February capacity fell 8.7 per cent as airlines scrambled to trim capacity in line with plunging traffic, and load factor fell 4.8 percentage points to 75.9 per cent.

IATA’s Director General and CEO, Alexandre de Juniac, said airlines were hit by a sledgehammer called COVID-19 in February as borders were closed in an effort to stop the spread of the virus.

“The impact on aviation has left airlines with little to do except cut costs and take emergency measures in an attempt to survive in these extraordinary circumstances.

“The 14.1 per cent global fall in demand is severe, but for carriers in Asia-Pacific the drop was 41 per cent. And it has only grown worse. Without a doubt this is the biggest crisis that the industry has ever faced,” de Juniac said.

February international passenger demand fell 10.1 per cent compared to February 2019, the worst outcome since the 2003 SARS outbreak and a reversal from the 2.6 per cent traffic increase recorded in January.

Europe and Middle East were the only regions to see a year-over-year traffic rise. Capacity fell 5.0 per cent, and load factor plunged 4.2 percentage points to 75.3 per cent.

African airlines’ traffic slipped 1.1 per cent in February, versus a 5.6 per cent traffic increase recorded in January and the weakest outcome since 2015.

The decline was driven by around a 35 per cent year-on-year traffic fall in the Africa-Asia market. Capacity rose 4.8 per cent, however, and load factor sagged 3.9 percentage points to 65.7 per cent, lowest among regions. Alexandre de Juniac described this period as aviation’s darkest hour and it is difficult to see a sunrise ahead unless governments do more to support the industry through this unprecedented global crisis.

“We are grateful to those that have stepped up with relief measures, but many more need to do so. Our most recent analysis shows that airlines may burn through $61 billion of their cash reserves during the second quarter ending 30 June 2020. This includes $35 billion in sold-but-unused tickets as a result of massive flight cancellations owing to government-imposed travel restrictions.

“We welcome the actions of those regulators, who have relaxed rules so as to permit airlines to issue travel vouchers in lieu of refunds for unused tickets; and we urge others to do the same. Air transport will play a much-needed role in supporting the inevitable recovery. But without additional government action today, the industry will not be in a position to help when skies are brighter tomorrow,” said de Juniac.