Air travel demand shows first signs of recovery

Airline industry has seen the bottom of the coronavirus crisis, say experts, as flights slowly begin to resume
Saudia is one of a number of airlines to have recently begun domestic operations and could soon restart international flights.
Saudia is one of a number of airlines to have recently begun domestic operations and could soon restart international flights.

Global demand for air travel has begun to recover slightly after hitting rock bottom in April when demand nosedived more than 94% year-on-year because of international travel restrictions brought on by the Covid-19 pandemic.

Daily flights rose 30% between the lowest point on 21 April and 27 May as domestic operations began to resume in various markets, including the Middle East.

The International Air Transport Association (IATA) suggested that while the increase is small, it implies that the industry has seen the bottom of the crisis, provided there is no recurrence.

“April was a disaster for aviation as air travel almost entirely stopped,” said Alexandre de Juniac, IATA’s CEO.

“But April may also represent the nadir of the crisis. Flight numbers are increasing. Countries are beginning to lift mobility restrictions. And business confidence is showing improvement in key markets such as China, Germany, and the US.”

In the Middle East, passenger traffic plummeted over 97% in April and capacity fell by more than 92%. In Africa, traffic sank nearly 99% while capacity shrank by just under 88%.

Airlines around the world are set to lose out on $314 billion in passenger revenue this year, a 55% reduction from 2019. While a number of carriers have gone bankrupt, some have secured state bailout packages.

But Emirates president Sir Tim Clark this week warned that some airlines could still got bust, even after securing bailouts, if they do not start flying meaningfully soon.

He said: “All the money that has gone into those companies is absorbing the cash obligations they have at the time.

“But it presupposes that you will be starting to fly meaningfully and profitably, generating positive cash flow in the next few months. Unfortunately, I don’t see it to the scale that these companies need to meet their cash obligations; so we’re nowhere near out of the woods.”

The initial flight increases have been concentrated in domestic markets. Data from late May shows that flight levels in Korea, China and Vietnam have risen to a point now just 22%-28% lower than a year earlier.

Searches for air travel on Google were up 25% by the end of May compared to the April low, although that is a rise from a very low base and still 60% lower than at the start of the year. 

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