This is Aviation’s Darkest Hour

IATA’s global passenger traffic data for February
2020 shows that demand, measured in total revenue passenger
kilometers (RPKs), fell 14.1% when compared to February 2019.

This is the steepest decline in traffic
since 11 September 2001 and reflects collapsing domestic travel in
China and sharply falling international demand to/from and within
the Asia Pacific region, owing to the spreading COVID19 virus and
government-imposed travel restrictions.

February capacity, measure in available seat kilometers
(ASKs), fell 8.7% as airlines
scrambled to trim capacity in line with plunging traffic, and load
factor fell 4.8 percentage points to 75.9%.

“Airlines were hit by a sledgehammer called
COVID19 in February,” said Alexandre de Juniac, IATA’s Director General and
CEO. “Borders were closed in an effort to stop the spread of the
virus. And 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% global
fall in demand is severe, but for carriers in Asia-Pacific the
drop was 41%. And it has only grown worse. Without a doubt this is
the biggest crisis that the industry has ever faced.”


February international passenger demand fell 10.1%
compared to February 2019, the worst outcome since the 2003 SARS
outbreak and a reversal from the 2.6% traffic increase recorded in
January. Europe and the Middle East were the only regions to see a
year-on-year traffic rise. Capacity fell 5.0%, and load factor
plunged 4.2 percentage points to 75.3%.

Asia Pacific airlines’ February traffic plummeted
30.4% compared to the same month in 2019, steeply reversing a 3%
gain recorded in January. Capacity fell 16.9% and load factor
collapsed to 67.9%, a 13.2-percentage point drop compared to
February 2019.

European carriers’ February demand was virtually
flat compared to February 2019 (+0.2%), the region’s weakest
performance in a decade. The slowdown was driven by routes to/from
Asia, where the growth rate slowed by 25 percentage points in
February, versus January. Demand in markets within Europe
performed solidly despite some initial flight suspensions on the
routes to/from Italy. However, March data will reflect the impact
of the spread of the virus across Europe and the related
disruptions to travel. February capacity rose 0.7%, and load
factor slipped 0.4 percentage point to 82.0%, which was the
highest among regions.

Middle Eastern airlines posted a 1.6% traffic
increase in February, a slowdown from the 5.3% year-on-year
growth reported in January largely owing to a slowdown on Middle
East – Asia Pacific routes. Capacity increased by 1.3%, and load
factor edged up 0.2 percentage point to 72.6%.

North American carriers had a 2.8% traffic decline
in February, reversing a 2.9% gain in January, as international
entry restrictions hit home and volumes on Asia-North America
routes plunged 30%. Capacity fell 1.5%, and load factor dropped
1.0 percentage point to 77.7%.

Latin American airlines experienced a 0.4% demand
drop in February compared to the same month last year. This
actually was an improvement over the 3.5% decline recorded in
January. However, the spread of the virus and resulting travel
restrictions will be reflected in March results. Capacity also
fell 0.4% and load factor was flat compared to February 2019 at
81.3%.

African airlines’ traffic slipped 1.1% in
February, versus a 5.6% traffic increase recorded in January and
the weakest outcome since 2015. The decline was driven by around a
35% year-on-year traffic fall in the Africa-Asia market. Capacity
rose 4.8%, however, and load factor sagged 3.9 percentage points
to 65.7%, lowest among regions.

Domestic Passenger Markets

Demand for domestic travel dropped 20.9% in
February compared to February 2019, as Chinese domestic market
collapsed in the face of the government lockdown. Domestic
capacity fell 15.1% and load factor dropped 5.6 percentage points
to 77.0%.

Chinese airlines’ domestic traffic fell 83.6% in
February, the worst outcome since IATA began tracking the market
in 2000. With the easing of some restrictions on internal travel
in March, domestic demand is showing some tentative signs of
improvement.

US airlines enjoyed one of their strongest months
in February, as domestic traffic jumped 10.1%. Demand fell toward
the end of the month, however, with the full impact of COVID19
expected to show in March results.

 “This is aviation’s darkest hour,” said de Juniac.
“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.”

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