The International Air Transport Association (Iata) says air travel made a “moderate rebound” in September, compared with August’s performance, and was driven by recovery in domestic markets, in particular China, where some travel curbs were lifted following the Covid-19 outbreaks in August.

International demand, meanwhile, slipped slightly compared with the previous month. 

Total demand for air travel in September – measured in revenue passenger kilometers, or RPKs – was down 53.4% compared with September 2019, which Iata says marked an uptick from August, when demand was 56% below August 2019 levels.  

Domestic markets were down 24.3% compared with September 2019, a significant improvement from August, when traffic was down 32.6% versus two years ago. All markets showed improvement with the exception of Japan and Russia, although the latter remained in solid growth territory compared with 2019. 

International passenger demand in September was 69.2% below that of September 2019, fractionally worse than the 68.7% decline recorded in August. 

“September’s performance is a positive development but recovery in international traffic remains stalled amid continuing border closures and quarantine mandates. The recent US policy change to reopen travel from 33 markets for fully vaccinated foreigners from November 8 is a welcome, if long overdue, development,” comments Iata director-general Willie Walsh.

He adds that, along with recent reopenings in other key markets like Australia, Argentina, Thailand and Singapore, “this should give a boost to the large-scale restoration of the freedom to travel”.

INTERNATIONAL PASSENGER MARKETS

European carriers’ September international traffic declined 56.9% versus September 2019, down one percentage point compared with the 55.9% decrease in August versus the same month in 2019.

Capacity dropped 46.3% and load factor fell 17.2 percentage points to 69.6%.

Asia-Pacific airlines, meanwhile, saw their September international traffic fall by 93.2% compared with September 2019, remaining virtually unchanged from the 93.4% drop registered in August versus August 2019, as the region continues to have the strictest border control measures.

Capacity dropped by 85.2% and the load factor was down 42.3 percentage points to 36.2%, easily the lowest among regions.

Middle Eastern airlines recorded a 67.1% demand drop in September compared with September 2019, slightly improved over the 68.9% decrease in August versus the same month in 2019.

Capacity declined by 52.6% and load factor slipped 23.1 percentage points to 52.2%. 

North American carriers experienced a 61% traffic drop in September versus the 2019 period, somewhat improved on the 59.3% decline in August compared with August 2019.

Capacity dropped by 47.6% and load factor fell 21.3 percentage points to 61.9%.

Latin American airlines saw a 61.3% drop in September traffic, compared with the same month in 2019, an upturn over the 62.6% decline in August compared with August 2019. September capacity fell by 55.6% and load factor dropped 10.7 percentage points to 72%, which was the highest load factor among the regions for the twelfth consecutive month. 

Additionally, African airlines’ traffic fell by 62.2% in September versus two years’ ago, almost four percentage points worse than the 58.5% decline in August compared with August 2019.

September’s capacity was down 49.3% and load factor declined 18.4 percentage points to 53.7%.

Brazil’s domestic market sustained its gradual recovery amid positive vaccination progress. Traffic was down 17.3% compared with September 2019 – improving from a 20.7% fall in August.

Japan’s September domestic traffic was down 65.5%, worsening from a 59.2% decline in August versus August 2019, owing to the impact of restrictions.

“Each reopening announcement seems to come with similar but different rules. We cannot let the recovery get bogged down in complication. The International Civil Aviation Organization High Level Conference on Covid-19 agreed that harmonisation should be a priority,” Walsh says.

In spite of this, Iata remains confident that global air cargo markets are showing that demand continues to be well above pre-crisis levels, despite capacity constraints persisting.  

Overall, global demand, measured in cargo tonne-kilometers (CTKs), was up 9.1% compared with September 2019 (9.4% for international operations), while capacity remains constrained at 8.9% below pre-Covid-19 levels (September 2019) (-12% for international operations).

Several factors are impacting on global air cargo demand, and include, besides others, supply chain disruptions and the resulting delivery delays leading to long supplier delivery times, which typically means manufacturers use air transport, which is quicker, to recover time lost during the production process.

The September global Supplier Delivery Time Purchasing Managers Index (PMI) was at 36. Values below 50 are favourable for air cargo. 

The September new export orders component and manufacturing output component of the PMIs have deteriorated from levels in the previous month but remain in favourable territory.

Manufacturing activity, meanwhile, continued to expand at a global level but, there was contraction in emerging economies. 

The inventory-to-sales ratio remains low ahead of the peak year-end retail events such as Single’s Day, Black Friday and Cyber Monday – Which is positive for air cargo, however further capacity constraints put this at risk, Iata warns.

The cost-competitiveness of air cargo relative to that of container shipping remains favourable, as pre-crisis, the average price to move air cargo was 12.5 times more expensive than sea shipping. In September, it was only three times more expensive.

“Air cargo demand grew 9.1% in September compared to pre-Covid levels. There is a benefit from supply chain congestion as manufacturers turn to air transport for speed. But severe capacity constraints continue to limit the ability of air cargo to absorb extra demand,” says Walsh.

Should this not be addressed, Walsh warns that bottlenecks in the supply chain will slow the economic recovery from Covid-19.

“Governments must act to relieve pressure on global supply chains and improve their overall resilience.”  

To relieve supply chain disruptions, including those highlighted by the US on supply chain resilience on the sidelines of last weekend’s G20 Summit, Iata is calling on governments to ensure that air crew operations are not hindered by Covid-19 restrictions designed for air travelers, and to implement the commitments governments made at the Icao High Level Conference on Covid-19 to restore international connectivity.

“This will ramp up vital cargo capacity with “belly” space,” Walsh says, adding that Iata is also calling for the provision of innovative policy incentives to address labour shortages where they exist.