The prospects for a return to normal for global air traffic keep receding. Companies are now betting on the 2024 horizon, one year later than expected, to regain the activity before the pandemic due to the coronavirus.
According to Brian Pearce, the financial manager of the International Air Transport Association (IATA), the recovery of traffic is slower than expected in May and June. In the second half of the year, this very slow pace should continue, he added, noting that the upsurge in Covid-19 in a number of countries was slowing down the reopening of borders.
“International markets remain largely closed. Consumer confidence is at half mast and is not helped by the British decision to impose a quarantine on all travelers returning from Spain ”, estimated the general manager of the organization, Alexandre de Juniac.
Decrease in business travel
The British government has decided to reintroduce without warning a quarantine for travelers arriving from Spain, catching thousands of Britons who left for their holidays in this country by Sunday. The more pessimistic forecasts can also be explained by the “Weak containment of the virus in the United States” which, with a number of emerging economies in the same situation, represent around 40% of the airline markets, according to the association.
The organization also blames the decline in business trips, replaced by video means, due to the difficult economic situation of businesses and consumers who are both cautious in terms of health and sometimes hit by the crisis.
The timid recovery in travel after the low point in traffic in April is very closely linked to domestic markets, especially in China where it was down only 35.5% in June, according to Pearce . To attract travelers, China Southern, China’s largest airline, launched unlimited flight packages on Tuesday.
Concern for small companies
In Paris, the manager of Charles de Gaulle and Orly airports also announced on Monday that it will be necessary to wait between 2024 and 2027 for traffic to return to the level of 2019. If traffic is slowly picking up on domestic flights and in space Schengen, the situation is also more difficult on international traffic which carries the activity of the Paris-Charles de Gaulle hub. According to the operator ADP, the reestablishment of international traffic may also be slowed down due to a lower supply from the companies.
According to Pearce, the way in which countries fight against the virus as well as the possible arrival of a vaccine against the Covid-19 will condition the evolution of the traffic. In June, it was still down 96.8% globally compared to the same period in 2019, compared to a decline of 98.3% in May.
The financial situation remains difficult for companies, especially the smaller ones. Government aid has enabled large companies to build up cash reserves which “Will help them get through an environment which now seems very difficult during the restart period”, underlined Mr. Pearce. “Our concern concerns small and medium-sized companies”, he continued adding that “Unfortunately bankruptcies will be inevitable unless demand picks up faster than expected.”
The organization, which brings together 290 airlines, estimates the shortfall in 2020 for the sector at $ 419 billion, due to the coronavirus crisis. That is a halving of global revenues from the commercial aviation sector.
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