IATA projected (27-Oct-2020) commercial airline industry full year 2020 traffic will be down 66% year-on-year, with Dec-2020 demand down 68%. Industry revenues in 2021 are expected to be down 46% compared to the 2019 figure of USD838 billion. The association's previous analysis was for 2021 revenues to be down around 29% compared to 2019, based on expectations for a demand recovery commencing in 4Q2020. Recovery has been delayed however, owing to new COVID-19 outbreaks, and government mandated travel restrictions including border closings and quarantine measures. [more - original PR]
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Alaska Air: sequential improvements on long road to recoveryAirlines worldwide continue to battle the fallout of the COVID-19 pandemic, but even as demand remains severely depressed, US operators are encouraged by sequential improvement in booking trends.
Alaska Air Group has observed a widening of booking curves and increases in passengers carried on a weekly basis, and it appears that customers are growing increasingly comfortable with air travel, even as the US enters what is being deemed a third wave of rising COVID-19 infections.
Of course, those encouraging signs remain against a backdrop of what is still severely depressed demand, but any positive trends are a welcome respite as airlines work to shore up demand, aiming to push revenue to a point where they can achieve break-even cash burn.
The Covid-19 pandemic has caught us all off guard. While the industry has faced numerous previous crises, the fact that subsequent recoveries occurred at different rates had led to complacency and ill-preparedness for an event of such magnitude.
"Initially when we started on this horrible expedition, there was an assumption it would be over in six months. Governments thought so as well but it's obvious now that won't be the case," Peter Harbison, chairman emeritus highlighted on 14-Oct-2020 at the inaugural CAPA Live – a new monthly virtual summit offering insights, information, data and live interviews across a next-gen virtual event platform.
“These priorities – which involved government subsidy of one form or another and airlines raising debt and equity – have now been overtaken, as the cash bleed will continue well into 2021. This is a big downturn, beyond comprehension, and a vaccine won't have a widespread impact at least before the middle of 2021," he warned. "Consumer confidence will be a key part of recovery; if consumers don't come back then obviously there is no industry … finding a uniform formula is key but still remains elusive.”
It is clear that travel and transport will remain subdued through 2021 and into subsequent years and the industry needs now to come to terms with the new landscape. But within this space there are pockets of demand that can support those that are adaptable and accept the world for what it is right now. That is a changed world where leisure demand dominates and business travel remains near-dormant.
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Qatar's Hamad Airport: expansion continues and cargo a focusQatar Airways occupied a valuable role in the early months of the pandemic: providing essential cargo services around the world that were not directly connected to its base, while the passenger division also provided more than its fair share, in some cases activating fifth freedom rights that it did not previously use.
Now, and in common with a small but growing number of airports elsewhere, the airline and the airport it operates are looking to the future and are adamant that the Phase II expansion of Doha’s Hamad Airport will continue, to help cement its position as a leading global hub in a ‘post-COVID’ world and with the 2022 World Cup now on the horizon.
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United Airlines pivots to its Houston, Denver airport hubsUS major airlines have undertaken some network shifts during the COVID-19 crisis as international borders have closed and business travel has dried up. United’s changes have included less emphasis on its coastal hubs and executing opportunities at interior hubs as leisure passengers are resuming at a faster rate than business customers.
Although US capacity remains down significantly year-on-year, some of the country’s operators are making tactical moves in United’s hubs, and that new competition is occurring as United and all operators are working to entice passengers to travel, likely through offering lower fares.
No one can predict if the changes in the US domestic market will be permanent, but even in the midst of a full-blown pandemic, competition remains robust.
After nine successive weeks of progressively worse year-on-year declines, Europe now has the deepest capacity cut of all world regions.
Seat numbers have been cut by -63.4% in the week commencing 19-Oct-2020. Middle East, previously occupying last place, now moves above Europe with a -62.8% cut, while Africa is -59.1%, Latin America -57.8%, North America -52.1% and Asia Pacific is -39.2%.
Ryanair, Europe's biggest airline, has cut its winter capacity plan from 60% to 40% of 2019 levels. EUROCONTROL DG Eamonn Brennan told CAPA Live October that he expected air traffic movements in Europe at 40% of last year's this winter, which suggests a lower figure for seat capacity (since long haul flights, with more seats, have been cut more heavily than short haul).
The EU's 'traffic light' approach to travel restrictions does not seem likely to alleviate the outlook to any meaningful degree. With Europe's aircraft perhaps only half full on average, passenger numbers could fall short of 25% of prior year traffic, pushing revenue even lower.
Expect European airline bankruptcies by the end of this winter.
Recorded at CAPA Australia Pacific Aviation Summit, 2 Sep 2020
Qantas Airways Group CEOs Q&A
Qantas Airways Group CEO, Alan Joyce highlights the impacts of ongoing boarder closures to the Australian economy and tourism, and the possibility of losing the hundreds of small businesses that rely on it every day if the current situation continues during the CAPA Australia Pacific Aviation Summit.
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UN World Tourism Organization (UNWTO), via its Jul/Aug-2020 World Tourism Barometer, reported (27-Oct-2020) international arrivals declined 70% for the first eight months of 2020. Traffic by region:
- Asia Pacific: -79%;
- Africa: -69%;
- Middle East: -69%;
- Europe: -68%;
- Americas: -65%. [more - original PR]
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28-Oct-2020 11:56 AM
India DGCA extends prohibition of scheduled international passenger services until 30-Nov-2020
India's Directorate General of Civil Aviation (DGCA), via its official Twitter account, announced (28-Oct-2020) it extended its prohibition on scheduled international passenger services to and from India until 30-Nov-2020, rather than until 31-Oct-2020. As previously reported by CAPA, scheduled international passenger services to and from India have been prohibited since 25-Mar-2020. The DGCA stated the prohibition "shall not apply to international all cargo operations and flights specifically approved by the DGCA" and noted "international scheduled flights may be allowed on selected routes by the competent authority on a case to case basis".
Garuda Indonesia welcomed (23-Oct-2020) a decision by Indonesia's government to provide passenger service charge (PSC) exemptions at 13 airports across Indonesia. President director Irfan Setiaputra stated the exemptions are a "significant strategy to support the recovery of airlines' performance, especially to attract the public to use air transportation services again". Mr Setiaputra added he hopes the policy will "bring positive impacts towards the increase of domestic passenger traffic". [more - original PR]
Harvard T H Chan School of Public Health reported (27-Oct-2020) researchers with the Aviation Public Health Initiative (APHI) released phase one of its ongoing research on strategies and practices to reduce the public health risks of flying during the COVID-19 pandemic. The report found that, through a layered approach to risk mitigation, the scientific evidence shows a low risk of coronavirus transmission on aircraft. It provides evidence that it is possible to leverage technology and modify behaviour to allow some near-normal activity while reducing the risks of disease transmission during the COVID-19 crisis. Analysis from the report shows aircraft ventilation systems reduce the possibility of exposure to COVID-19, lower than other common settings. This effectively counters the proximity travellers are subject to during flights. Because of the frequent exchange of air and HEPA filters on planes, over 99% of the particles containing the virus are removed from cabin air. In addition to the air filtration systems, synergistic layers include:
- Universal wearing of facemasks by passengers and crew throughout the journey;
- Distancing protocols and provision of strong ventilation during boarding and deplaning;
- Disinfection of high-touch aircraft surfaces to remove contamination;
- Passenger attestations that they do not have COVID-19 related symptoms and commitment to adhere to airline mask policy. [more - original PR]
ANA Holdings CFO Ichiro Fukuzawa stated (27-Oct-2020) the group's results in the three months to Sep-2020 "recovered significantly" compared to the three months ended Jun-2020, adding that this "proves that we've already bottomed out and are seeing dramatic recovery". [more - original PR]
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