Traffic Forecast Downgraded

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The International Air Transport Association (IATA) has downgraded its traffic forecast for 2020 to reflect a weaker-than-expected recovery, as evidenced by a dismal end to the summer travel season in the northern hemisphere. IATA now expects full-year 2020 traffic to be down 66 per cent, compared to 2019. The previous estimate was a 63 per cent decline.

August passenger demand continued to be hugely depressed against normal levels, with revenue passenger kilometers (RPKs) down 75.3 per cent, compared to August 2019. This was only slightly improved compared to the 79.5 per cent annual contraction in July. Domestic markets continued to outperform international markets in terms of recovery, although most remained substantially down on a year ago. August capacity (available seat kilometers or ASKs) was down 63.8 per cent compared to a year ago, and load factor plunged 27.2 points to an all-time low for August of 58.5 per cent.

Based on flight data, the recovery in air passenger services was brought to a halt in mid-August by a return of government restrictions in the face of new COVID-19 outbreaks in a number of key markets. Forward bookings for air travel in the fourth quarter show that the recovery since the April low point will continue to falter. Whereas the decline in year-on-year growth of global RPKs was expected to have moderated to -55% by December, a much slower improvement is now expected with the month of December forecast to be down 68 per cent on a year ago.