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MENA travel reskilling, upskilling, and recovery path underway despite COVID-19 mutant ‘mu’

There is a new COVID-19 mutant on a warpath against both vaccinated and unvaccinated people and it could set the airline industry back as soon as its full intent is understood. Meanwhile, the travel sector shows signs of recovery

The mutant was added to the WHO list of “variants of interest” Total demand for air travel in July 2021 was down 53.1% compared to July 2019 (60% in June) Middle Eastern airlines posted a 74.5% demand drop in July compared to July 2019 (79.2% decrease in June)

The World Health Organization is monitoring a new coronavirus variant called “mu.” It has mutations that have the potential to evade immunity provided by a previous Covid-19 infection or vaccination, the WHO announced on Sept. 1.

The mutant was added to the WHO list of “variants of interest.” Variants of interest aren’t quite as bad as a “variant of concern” such as the delta variant, defined as a mutant that causes increased spread and severity, or decreased effectiveness of public health measures such as vaccines or social distancing. But it’s still a threat.

Still, MENA countries like UAE, Bahrain, Qatar have achieved high vaccination rates and are slowly allowing travelers from less affected countries. These factors, in the wake of the ongoing COVID-19 pandemic across the globe, are driving the travel industry in the MENA region to go on a major re-skilling drive.

“Rapidly changing government policies to curb the impact of different variants of the coronavirus and shifts in people’s travel behavior during the pandemic have led to the restructuring of the hospitality sector,” Jasmine Nahhas di Florio, Senior Vice President Strategy, Partnerships & Communications at Education For Employment said.

“A temporary demand drops in the travel segment has provided an opportunity for re-skilling and up-skilling in order to meet the new sets of requirements in the industry and fast adopting contactless technologies and processes.”

Prior to the Covid-19 outbreak, Europe and the Middle East accounted for more than a third of global air passenger traffic and almost half of the total earnings from inbound international tourism. According to the report in 2018 by United Nations World Tourism Organization (UNWTO), around 87 million tourists visited MENA countries and generated $72 billion from the tourism sector.

 However, mid-2020 job loss estimates for the European and Middle Eastern travel and tourism industries stood at 14–30 million and 3–5 million respectively.

A recent survey of 4,700 respondents from 11 countries around the world, conducted by the International Air Transport Association (IATA), revealed that 57% expected to be traveling within two months of the pandemic’s containment, and 72% will do so as soon as they can meet friends and family.

“Digital literacy and emotional intelligence skills will help travel industry workers stay relevant in this more dynamic and digitized market,” said Jasmine.  

July passenger traffic

IATA announced that both international and domestic travel demand showed significant momentum in July 2021 compared to June, but demand remained far below pre-pandemic levels. Extensive government-imposed travel restrictions continue to delay recovery in international markets.

Total demand for air travel in July 2021 (measured in revenue passenger kilometers or RPKs) was down 53.1% compared to July 2019. This is a significant improvement from June when demand was 60% below June 2019 levels. 

International passenger demand in July was 73.6% below July 2019, bettering the 80.9% decline recorded in June 2021 versus two years ago.

Total domestic demand was down 15.6% versus pre-crisis levels (July 2019), compared to the 22.1% decline recorded in June over June 2019.  

“The problem is border control measures. Government decisions are not being driven by data, particularly with respect to the efficacy of vaccines. A recovery of international travel needs governments to restore the freedom to travel. At a minimum, vaccinated travelers should not face restrictions. That would go a long way to reconnecting the world and reviving the travel and tourism sectors,” said Willie Walsh, IATA’s Director General.

Middle Eastern airlines posted a 74.5% demand drop in July compared to July 2019, better than the 79.2% decrease in June, versus the same month in 2019. Capacity declined 59.5%, and load factor deteriorated around 30 percentage points to 51.3%.

Air passenger market detail- July 2021

  • RPK: Revenue Passenger Kilometers measures actual passenger traffic
  • ASK: Available Seat Kilometers measures available passenger capacity
  • PLF: Passenger Load Factor is % of ASKs used

View the full July Air Passenger Market Analysis (including 2021 vs. 2020 comparisons) here.

Strong cargo demand continues

IATA released July 2021 data for global air cargo markets showing that demand continued its strong growth trend.

Global demand, measured in cargo ton-kilometers (CTKs), was up 8.6% compared to July 2019.  

Capacity continues to recover but is still 10.3% down compared to July 2019. 

The inventory-to-sales ratio remains low ahead of the peak year-end retail season.

Air cargo market detail – July 2021

World         July 2021 (% ch vs the same month in 2019)   

 

  • CTK: cargo ton-kilometers measures actual cargo traffic
  • ACTK: available cargo ton-kilometers measures available total cargo capacity
  • CLF: cargo load factor is % of ACTKs used

 

Middle Eastern carriers posted an 11.3% rise in international cargo volumes in July 2021 versus July 2019. This was a decrease compared to the previous month (15.8%).  

View the air cargo market analysis for July 2021 (pdf) here.