Airport authorities and airlines will have to launch a set of confidence-building measures to get people back on air travel, a move that will be quick yet slow. The International Air Transport Association's (IATA) analyses suggest that those who use air travel for professional, family or tourist reasons are "full of doubts about the preventive measures against the COVID-19 coronavirus that will be imposed on the aviation industry in a few weeks", warns Alexandre de Juniac, IATA's Executive Director General.
IATA's recent studies indicate that “an immediate rebound from the catastrophic fall in passenger demand appears unlikely”, that the decline in demand "will continue," and that only after an official declaration of the end of the pandemic will a "timid and very gradual" rise in airline seat availability begin.
An IATA survey conducted in recent weeks shows that 60% of potential travellers will not take a flight again until "one or two months" after the pandemic is finally contained. But 40% respond that they could wait "six months or more" and 69% are inclined to delay their travel plans until their personal financial situation has "stabilized".
The first signs of cautious behaviour to resume air travel are seen in the domestic markets of China and Australia, where official coronavirus infection rates have fallen to very low levels. The performance of the domestic market in both countries is an indicator that the widespread recovery of air traffic will begin with domestic flights, followed by the liberalization of regional and then intercontinental routes, as governments progressively remove their restrictions.
In spite of the prospects announcing the forthcoming end of the air traffic blockade, the latest studies and assessments of the evolution of global air traffic continue to show an increase in the deterioration of the sector in all countries of the world, more pronounced in the main economies.
The International Civil Aviation Organization (ICAO) forecasts that revenue losses will range between $160 billion and $253 billion between January and September. The UN organisation predicts that the number of passengers on international flights could fall by 1.2 billion by September compared to a traditional year, "mostly in Europe, especially during the high summer season".
IATA's chief economist, Brian Pearce, has prepared reports updating the forecast for this year. The immediate consequences of his analysis are an annual collapse in global revenues of $314 billion, which is half of the turnover for 2019.
The studies have been carried out on the basis of the current scenario, with air traffic virtually paralysed, the airlines' sources of income volatilised and severe restrictions on scheduled and charter passenger flights which, as a whole, will continue for three months. Looking ahead, "we do not expect even a modest recovery in the third quarter of this year," confirms the IATA chief economist.
Cost reductions have failed to save airlines from a liquidity crisis and the situation is deteriorating to the point where many airlines are "already in survival mode," says IATA's regional vice president for Asia-Pacific, Conrad Clifford. And if governments do not implement effective remedies, there will be a collapse in air transport on such a scale that "it will have a devastating effect on economies and employment in all countries.
On the employment front, the Association's latest foresight studies raise the number of jobs at risk to 25 million, both in aviation and its related value chains, including tourism. This is despite the fact that airlines continue to play an important role in the transport of essential goods, especially in the emergency transport of medical supplies and the repatriation of thousands of people stranded around the world due to travel restrictions.
With 19 national airlines and a dozen private companies in the Middle East and North Africa, where aviation is a key pillar of many nations' economies, the effects of air travel paralysis are very serious. IATA forecasts that some $24.5 billion will be lost compared to 2019, some $5 billion more than expected 30 days ago. That is a drop from 39% contemplated a month ago to a now predicted 51% drop from last year, with a threat to 1.2 million jobs.
Saudi Arabia is expected to lose 7.2 billion and to lose 35 million passengers, which will affect 287,500 jobs. The increase in the collapse is clear: just a month ago the figures were 5.61 billion dollars, 26.7 million passengers and 217,570 jobs, respectively.
Emirates will lose $6.8 billion - $5.36 billion a month ago - 31 million passengers - 23.8 days ago - and put 378,700 jobs at risk, some 11,000 more. Fortunately, his national airline, Etihad Airways, has updated its forecasts and will reschedule its flights once the global situation improves. From May 1st to June 30th, 40 regular routes will be activated from Abu Dhabi airport to destinations in Europe, Africa and Canada.
Egypt is the third country in the region to be affected, with 2.2 billion dollars disappearing - 1.6 billion four weeks ago - 13 million fewer passengers - 9.5 million before - which will have a negative impact on 279,800 jobs, compared to 205,000 in the second half of March.
In Europe, where the collapse has been greater than expected, the situation has also worsened, affecting nearly 90% of air traffic and putting 6.7 million jobs at risk. The potential decline in revenue for carriers in the old continent has grown to $89 billion and the fall in ticket demand is 55% below 2019 levels. A month ago, IATA estimates pointed to a loss of $76 billion and a 46% decline in passengers.
Falls are increasing in all countries, but mainly in the UK, Germany and Spain. The new estimates assign to the United Kingdom a drop in sales of $26.1 billion and a decrease of 140 million passengers, putting at risk the work of 661,200 people.
Germany could reach losses of 17.9 billion and the number of passengers could fall by 103 million, putting 483,600 jobs at risk. Europe's leading air transport group, Lufthansa, is exhausting its financial reserves and is already negotiating with the authorities in Germany, Austria, Belgium and Switzerland - countries where the company is based - to ensure its solvency. In Spain, the economic decline will be 15.5 billion dollars and the drop in passengers is estimated at 114 million, with 901,300 jobs in a fragile situation.
In Italy, the first European country to suffer the consequences of the coronavirus, the italian government will take Alitalia's full control in June. The airline has gone bankrupt due to the coronavirus crisis, as announced by its Minister of Industry, Stefano Patuanelli. The Air France-KLM Group alliance has requested the support of both the French and Dutch states so that the company "can overcome its liquidity needs in the third quarter," according to Anne-Marie Couderc, President of the Board of Directors of Air France-KLM.
For companies in the Asia-Pacific region, revenue is projected to decline by $113 billion and fares to fall by 50 per cent compared to 2019. The above data reflect a clear worsening of the situation, as estimates in the second half of March predicted a drop of $88 billion and a 37% drop in passengers.
In terms of employment, 11.2 million people are at risk of losing their jobs, both those directly dependent on the aviation industry and those linked to tourism.
African airlines could lose $6 billion in passenger revenue by 2019, which is $2 billion more than expected at the beginning of the month. South Africa, Nigeria and Kenya will be the most affected countries.