First data on the impact of Covid-19 on international airlines released

13th March 2020

By: Rebecca Campbell

Creamer Media Senior Deputy Editor

     

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The International Air Transport Association (Iata), the representative body of the world’s airlines, has released its first monthly global passenger demand data for this year, covering January. This provides the first data on the effects of the Covid-19 (the novel coronavirus disease) outbreak on the industry.

Passenger demand is measured in revenue passenger kilometres (RPKs), and total demand in January rose by 2.3%, compared with January 2019. However, RPKs in December 2019 increased by 4.6%, compared with December 2018. And the January 2020 increase was the lowest monthly rise since April 2010 (when air travel to, from and within Europe was severely disrupted by huge volcanic ash clouds which erupted from the Eyjafjallajökull volcano, in Iceland).

“January was just the tip of the iceberg in terms of the traffic impacts we are seeing owing to the Covid-19 outbreak, given that major travel restrictions in China did not begin until January 23,” cautioned Iata director-general and CEO Alexandre de Juniac. “Nevertheless, it was still enough to cause our slowest traffic growth in nearly a decade.” Airline capacity in January rose by 1.7%, and the airliner load factor by 0.6% to 80.3%. (Load factor is the proportion of revenue-generating seats on an airliner that are sold.)

The regions least affected by Covid-19 in January were Africa and the Middle East. African airlines international passenger traffic grew by 5.3% that month, a slight rise from the 5.1% increase in December. African airline capacity grew by 5.7%, but the load factor declined by 0.3% to 70.5%.

The only region that grew faster than Africa was the Middle East, which saw international passenger demand increase by 5.4%. Covid-19 had no significant effect on Middle East-Asia routes during January. Middle East airline capacity rose by only 0.5% and the load factor went up 3.6% to 78.3%.

European international passenger demand went up by only 1.6% (year-on-year), owing to slowing economic growth in major economies during the fourth quarter of last year, as well as Covid-19-related flight cancellations late in January. International demand for North American airlines went up 2.9% year-on-year, a deceleration from the 5.2% achieved in December. Social unrest and weak economies in Latin America meant that airlines in that region continued to experience weak demand, a situation that has now been going on for four consecutive months. International passenger demand in Latin America fell by 3.7% in January, compared with a 1.3% reduction in December.

Asia-Pacific airlines saw a year-on-year increase of 2.5% in their international passenger demand in January. But this was a fall in relation to the 3.9% rise recorded in December. This was partly due to the effects of Covid-19 on international traffic to and from China, but also because of weaker economic growth in a number of the region’s major economies. However, Chinese domestic air passenger demand dropped by 6.8% in January, as a consequence of Covid-19-related travel restrictions and flight cancellations. Iata noted that the Chinese Ministry of Transport had reported an annual fall of 80% in passenger volumes in late January and early February.

“The Covid-19 outbreak is a global crisis that is testing the resilience of not only the airline industry but also the global economy,” stressed De Juniac. “Airlines are experiencing double-digit declines in demand and, on many routes, traffic has collapsed. Aircraft are being parked and employees are being asked to take unpaid leave. In this emergency, governments need to consider the maintenance of air transport links in their response. Suspension of the 80/20 slot-use rule and relief on airport fees at airports where demand has disappeared are two important steps that can help ensure that airlines are positioned to provide support during the crisis and eventually in the recovery.”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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