IATA announced that total demand for air travel in August 2021, measured in revenue passenger kilometers (RPKs), was down 56% compared to August 2019. This was entirely driven by domestic markets, which were down 32.2% compared to August 2019.
International passenger demand in August was 68.8% below August 2019, but still, an improvement compared to the 73.1% decline recorded in July with all regions showing progress due to growing vaccination rates and less stringent international travel restrictions in some countries.
Middle Eastern airlines had a 69.3% passenger demand drop in August 2021 compared to August 2019.
IATA reported that air travelers are increasingly frustrated with the COVID-19 travel restrictions. A survey commissioned by IATA in 11 markets last September showed 67% of respondents felt that most country borders should be opened now, up 12% from the June 2021 survey. 64% felt that border closures are unnecessary and have not been effective in containing the virus, 11% up from June.
84% of respondents indicated that they will not travel if there is a chance of quarantine at their destination while 75% indicated that the cost of testing is a significant barrier to travel, and 80% believe that governments should bear the cost of testing.
Robust demand for air cargo is expected to continue with 2021 demand at 7.9% above 2019 levels, growing to 13.2% above 2019 levels for 2022.
The World Trade Organization forecasts world trade to grow at 9.5% in 2021 and 5.6% in 2022. In 2021, cargo demand is expected to exceed pre-crisis (2019) levels by 8%, while in 2022, it is to exceed by 13%.
Global demand, measured in cargo ton-kilometers (CTKs*), was up 7.7% last August compared to August 2019 (8.6% for international operations).
Middle Eastern carriers experienced a 15.4% rise in international cargo volumes in August 2021 versus August 2019. International capacity decreased 5.1%.
Overall revenues in 2021 are expected to grow by 26.7% compared to 2020 to $472 billion (similar to 2009 levels). Further growth of 39.3% in 2022 will see industry revenues rise to $658 bn (similar to 2011 levels).
The passenger business will contribute $227 bn to industry revenues in 2021, rising to $378 bn in 2022. Cargo revenues are expected to rise to a record $175 bn in 2021 with a similar $169 bn expected in 2022.
Airlines achieved aggressive cost reductions having reduced overall expenses by 34% in 2021 compared to 2019. Costs, however, will rise in 2022 and will be only 15% lower compared with pre-crisis levels with expanded operations and higher fuel prices.
The price of jet kerosene was the only respite for airlines in 2020. It fell to $46.6/barrel in 2020 from $77/barrel in 2019.
Non-fuel unit costs rose 19% in 2020 compared to 2019, as fixed costs had to be spread over a dramatically smaller capacity base. This will partially reverse in 2021 with an 8% reduction from 2020 levels.
Airline industry outlook
IATA announced its latest outlook which showed net industry losses are expected to decline to $11.6 bn in 2022 after a $51.8 bn loss in 2021. There were 11.3 million jobs (pre-COVID-19) in the aviation industry, and a $3.5 trillion of GDP associated with travel and tourism.
Total industry losses in 2020-2022 are expected to reach $201 bn. Demand is expected to stand at 40% of 2019 levels for 2021, rising to 61% in 2022. Total passenger numbers are expected to reach 2.3 bn in 2021. This will grow to 3.4 bn in 2022 which is similar to 2014 levels and below the 4.5 bn travelers of 2019.
Domestic demand, with fewer restrictions in most countries, is driving the recovery. In 2021, domestic demand is expected to reach 73% of pre-crisis (2019) levels and in 2022 93% of pre-crisis levels.
Safety measures aboard airplanes
IATA’s survey revealed that among those who have traveled since June 2020, 86% felt safe on board the flight owing to the COVID-19 measures with 88% feeling airline personnel are doing a good job in enforcing COVID-19 rules and 87% supported wearing masks.
IATA Travel Pass
IATA announced that Etihad Airways, Jazeera Airways, Jetstar, Qantas, Qatar Airways, and Royal Jordanian will implement IATA Travel Pass in a phased rollout across the airlines’ networks. These five airlines join Emirates Airline as IATA Travel Pass implementation pioneers.
“The app has proven itself to be an effective tool to manage the complex mess of travel health credentials that governments require,” said Willie Walsh, IATA’s Director-General.
The app offers a safe and secure way for travelers to check the requirements for their journey, receive test results and scan their vaccine certificates, verify that these meet the destination and transit requirements, and share these effortlessly with health officials and airlines prior to departure.
Currently, vaccine certificates from 52 countries (56% of global air travel) can be managed using the app. This will increase to 74 countries, representing 85% of global traffic, by the end of November.