The International Air Transport Association (IATA) announced a moderate rebound in air travel in September 2021 compared to August’s performance. This was driven by a recovery in domestic markets, in particular China, where some travel curbs were lifted. International demand, meanwhile, slipped slightly compared to the previous month.
Total demand for air travel in September 2021 (measured in revenue passenger kilometers or RPKs) was down 53.4% compared to September 2019. This marked an uptick from August, when demand was 56.0% below August 2019 levels.
Domestic markets were down 24.3% compared to September 2019, a significant improvement from August 2021, when traffic was down 32.6% versus two years ago.
International passenger demand in September was 69.2% below September 2019, fractionally worse than the 68.7% decline recorded in August.
Middle East passenger markets
Middle Eastern airlines had a 67.1% demand drop in September compared to September 2019 and slightly improved over the 68.9% decrease in August, versus the same month in 2019. Capacity declined 52.6%, and load factor slipped 23.1% to 52.2%.
“Each re-opening announcement seems to come with similar but different rules. We cannot let the recovery get bogged down in complications. The ICAO High-Level Conference on COVID-19 agreed that harmonization should be a priority. The G20 declared a commitment to take action to support recovery with seamless travel, sustainability, and digitalization. Now governments must put actions behind these words to realize simple and effective measures. People, jobs, businesses, and economies are counting on real progress,” said Willie Walsh, IATA’s Director-General.
Air Cargo up
IATA released September 2021 data for global air cargo markets showing that demand continued to be well above pre-crisis levels and that capacity constraints persist.
Global demand, measured in cargo ton-kilometers (CTKs*), was up 9.1% compared to September 2019 (9.4% for international operations).
Capacity remains constrained at 8.9% below pre-COVID-19 levels, specifically September 2019 (-12% for international operations).
Supply chain disruptions and the resulting delivery delays have led to long supplier delivery times.
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. This is positive for air cargo, however, further capacity constraints put this at risk.
The cost-competitiveness of air cargo relative to that of container shipping remains favorable. Pre-crisis, the average price to move air cargo was 12.5 times more expensive than sea shipping. In September 2021 it was only three times more expensive.
“Severe capacity constraints continue to limit the ability of air cargo to absorb extra demand. If not addressed, 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,” said Walsh.
Middle Eastern carriers experienced a 17.6% rise in international cargo volumes in September 2021 versus September 2019, an improvement compared to the previous month (14.7%). International capacity was down 4% compared to September 2019.
To view the Air Cargo Market Analysis for September 2021, click here.
Sustainability in business travel
The Global Business Travel Association’s BTI Outlook forecasts that global business travel spend will only recover to 2019 levels by 2025. The Middle East’s business travel will inevitably resume, and sustainability is already redefining how we’ll get around in the post-Coronavirus age.
One of the positive effects of the pandemic is the decrease in carbon emissions. This has made many consumers more conscious of climate change and environmental issues and has raised demands for businesses to rebuild with sustainability in mind.
Lonely Planet and Culture Trip, two widely known travel guides, formed a strategic partnership to reimagine getaways that are more eco-friendly. The goal of their ‘Travel Reborn’ is what the two brands are calling conscientious travel.
Business travel’s impact on the planet has put sustainability at the top of the agenda for many corporate travel decision-makers because work trips are a key component of the economy. Employee safety and security, reshaping management travel and expenses, rethinking corporate programs are all part of the new focus on making travel sustainable.
Gartner is looking at digital vaccine passports and standardized covid testing to reopen travel safely.
Digital vaccine passports, which could easily be scanned alongside paperless airline tickets to access an online record of what a traveler has been inoculated against, could open up the industry. The World Health Organization (WHO) has already launched a task team to develop a global standard for a digital vaccine certificate.
ICT can also have a significant impact on mitigating the risk of climate change. While technology has always been an important part of corporate travel programs, from online booking systems to e-receipts and bots completing expense reports, innovation within this field will continue to grow and disrupt the sector. Organizations can use a smart program like SAP Concur to gain full visibility into travel spend data, adhere to policy compliance, and create a must-needed sustainability framework.
“The ramifications of COVID-19 will not be restricted to updated priorities in office routines and meeting preferences. There is a bigger cultural impact to come in the form of enhanced environmental consciousness and a sharper focus on carbon footprints,” says Mark Cullen, Managing Director for EMEA South at SAP Concur.
He said it is commercially critical for organizations to “think through the economics such that their partners, particularly on the travel side, are compensated to reflect those goals.”
According to SAP’s Corporate Travel Sustainability Index 2020, nearly two-thirds of corporate travel decision-makers said that sustainability is an integral part of their business travel policies.