Airlines in for harsh winter as passenger confidence is slow to recover

Airlines in the Northern Hemisphere are most vulnerable to risk in the winter season
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Iata, Airline, Alexandre de Juniac

Changing passenger behaviours and waning confidence mean that an already difficult winter season will be even tougher for airlines trying to build new schedules as part of their recovery plans.

Summer demand for air travel has been decimated by Covid-19 and while domestic and some international services are starting to return, experts are warning that the winter could prove too much for some operators without adequate support.

Airlines are expected to post a loss of $84 billion in 2020 and with the bulk of airlines making their money in the northern summer season, few can rely on the winter season to recover lost revenues.

Only 45% of travellers intend to fly within a few months of the pandemic subsiding, according to a June survey by the International Air Transport Association (IATA). A further 36% said that they would wait six months.

That is a significant shift from April 2020 when 61% said that they would return to travel within a few months of the pandemic subsiding and 21% responded that they would wait about six months.

Passengers are also booking much closer to the time of travel. A total of 41% of passengers are booking just three days before they fly compared to 18% in 2019.

“Forward bookings are down, and people are hedging their travel bets by booking closer to the time of travel,” said Alexandre de Juniac, IATA’s CEO. “Airlines will need much more flexibility to plan schedules around these changing consumer trends. Financial and operational flexibility equals survival.”

IATA has asked for the extension of the waiver on 80:20 airport slot rules and continued financial assistance from governments.

Mr de Juniac said that while passenger numbers are moving in the right direction, the industry is by no means anywhere near normal or sustainable levels of activity.

“Financial relief measures are still desperately needed. And policy-relief measures like a slot usage waiver remain critical. Governments need to grant that by no later than the end of July to provide at least that certainty for this beleaguered and battered industry.”

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