Recovery needs confidence measures, says Iata

iata, aviation

The International Air Transport Association (IATA) has asked governments to work with industry on confidence-building measures in the face of a slow, anticipated recovery in demand for air travel.

“Passenger confidence will suffer a double blow even after the containment of the pandemic, hit by personal economic concerns in the face of an impending recession and persistent concerns about travel security. Governments and industry must be quick and coordinated with measures to increase confidence, ”said Iata’s general director and CEO, Alexandre de Juniac.

A survey commissioned by the organization confirmed that 60% of travelers anticipate the return of their trip within one to two months after the containment of the pandemic, but 40% indicate that they can wait six months or more. Among the respondents, 69% indicated that they could postpone the return of the trip until their personal financial situation stabilized.

The first indications of this cautious return-to-travel behavior are seen in the domestic markets of China and Australia, where new rates of coronavirus infection have fallen to very low levels.

In China, domestic demand started to recover when the rate of new infections dropped to single digits and quickly moved to zero. Although there was an initial spike from mid-February to the first week of March, the number of domestic flights rose by just over 40% from pre-COVID-19 levels. Actual demand is expected to be significantly weaker as the occupancy on these flights is low.

In Australia, domestic demand continued to deteriorate even after the rate of new infections dropped by one digit. In fact, there is still no sign of recovery, even when new infections approach zero. The behavior of the domestic market is a critical indicator, as post-pandemic recovery must be led by domestic travel, followed by regional travel and then intercontinental travel, as governments progressively remove restrictions.

“In some economies, the spread of COVID-19 has slowed to the point where governments plan to lift the most severe elements of social distance restrictions. But an immediate recovery from the catastrophic drop in passenger demand seems unlikely. People still want to travel. But they are telling us that they want clarity on the economic situation and will probably wait at least a few months after the end to return to heaven, ”said de Juniac.

This week, Iata is holding regional summits with governments and industry partners to start planning an eventual restart for the air transport sector. In addition to confidence-building and stimulus measures, the expected slow recovery also adds urgency to the need for emergency financial relief measures. Passenger revenues are expected to be $ 314 billion below 2019 (-55%) and airlines will lose about $ 61 billion in liquidity in the second quarter alone, with demand dropping 80% or more.

“The passenger business stopped unilateral actions by the government to prevent the spread of the virus. The restart of the industry, however, must be built with confidence and collaboration. And it must be guided by the best science that we have available. Time is essential. We must start building a framework for a global approach that gives people the confidence they need to travel again. And, of course, this will need to be reinforced by economic stimulus measures to combat the impact of a recession, ”concluded De Juniac.

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