Complex Made Simple

Travel will be back but with major hurdles to overcome

A long term view for passenger demand recovery shows that people remain eager to travel in the short and long term, with certain caveats

In 2021, global passenger numbers are expected to recover to 52% of pre-COVID-19 levels (2019) Vaccination rates in developed countries (except for Japan) should exceed 50% of the population by Q3, 2021 Airport processing times reach 3 hours during peak time with travel volumes at only about 30% of pre-COVID-19 levels

The International Air Transport Association (IATA) and Tourism Economics released a long-term view for post-COVID-19 passenger demand recovery which demonstrates that people remain eager to travel in the short and long-term. 

Forecast highlights include:

  • In 2021, global passenger numbers are expected to recover to 52% of pre-COVID-19 levels (2019).
  • In 2022, global passenger numbers are expected to recover to 88% of pre-COVID-19 levels.
  • In 2023, global passenger numbers are expected to surpass pre-COVID-19 levels (105%).

By 2030, global passenger numbers are expected to have grown to 5.6 billion. That would be 7% below the pre-COVID-19 forecast and an estimated loss of 2-3 years of growth due to pandemic.

The recovery in passenger numbers is slightly stronger than the recovery in demand measured in revenue passenger kilometers (RPKs), which is expected to grow by an annual average of 3% between 2019 and 2039. This is owing to the expected strength of domestic markets like China with large passenger numbers and shorter distances.

Other encouraging stats are that consumers have accumulated savings in the lockdowns, in some cases exceeding 10% of GDP and vaccination rates in developed countries (except for Japan) should exceed 50% of the population by Q3, 2021.

“The immediate challenge is to reopen borders, eliminate quarantine measures and digitally manage vaccination/testing certificates. At the same time, we must assure the world that aviation’s long-term growth prospects are supported with an unwavering commitment to sustainability. Both challenges require governments and industry to work in partnership. Aviation is ready. But I don’t see governments moving fast enough,” said Willie Walsh, IATA’s Director-General.

Aviation is committed to cutting its net carbon emissions to half of 2005 levels by 2050.  A low-carbon energy transition for aviation has commenced with sustainable aviation fuels that are powering flight today, to be followed by electric and hydrogen-powered aircraft.  

Read: Saudia is leading regional air travel this summer, eyes return to profitability in 2024

Read: IATA’s vision for travel, aviation industry’s performance, and revenue projections for 2021

Digitalization for a smooth restart

IATA warned of potential airport chaos unless governments move quickly to adopt digital processes to manage travel health credentials (COVID-19 testing and vaccine certificates) and other COVID-19 measures. The impacts will be severe.

Pre-COVID-19, passengers, on average, spent about 1.5 hours in travel processes for every journey (check-in, security, border control, customs, and baggage claim).

Current data indicates that airport processing times have ballooned to 3 hours during peak time with travel volumes at only about 30% of pre-COVID-19 levels. The greatest increases are at check-in and border control (emigration and immigration) where travel health credentials are being checked mainly as paper documents.

Statistical models suggest that, without process improvements, the time spent in airport processes could reach 5.5 hours per trip at 75% pre-COVID-19 traffic levels, and 8 hours per trip at 100% pre-COVID-19 traffic levels.

“Nobody will tolerate waiting hours at check-in or for border formalities. We must automate the checking of vaccine and test certificates before traffic ramps up. Technical solutions exist. But governments must agree on digital certificate standards and align processes to accept them. And they must act fast,” said Walsh.

The G20 Rome Guidelines for the Future of Tourism calls for a common international approach on COVID-19 testing, vaccination, certification, and information as well as promoting digital traveler identity.

The G7 discussions, which commence on 11 June, are the next opportunity for leading governments to develop a solution around four key actions by agreeing to:

  • Issue vaccination certificates based on World Health Organization (WHO) Smart Vaccine Certificate data standards including QR codes
  • Issue COVID-19 test certificates in accordance with the data requirements set out by the International Civil Aviation Organization (ICAO)
  • Accept digital COVID-19 test and vaccine certificates at their borders

Emirates Airlines outlook  

Sir Tim Clark, President of Emirates, gave a candid outlook about the recovery of the aviation industry at the recent ATM event.

“The ideal situation is that the vaccine program beats the virus by Autumn of this year and we get some relief, then demand will come back at a staggering rate. Low cost (airlines) will benefit from intra-European travel, the US domestic market, China’s domestic market and international travel will (also) return in large numbers,” said Sir Tim. 

“But the problem (with this scenario) will be twofold. The ability of airlines to meet the demand when it comes and two, the conditionality of country access requirements,” he added.

On the latter point, Sir Tim explained that even though there is massive pent-up demand, there may well be inhibitors too. Some passengers might be nervous and worried about variant strains of the Coronavirus, and the situation in India, he said, is creating a ripple effect across the global economy. 

Although airlines and airports had really worked hard to ‘sanitize’ how they managed passenger welfare, mitigating risk through their protocols, that alone would not be enough. 

“It’s a question of how we navigate the next six months and if we do it right with equitable vaccine distribution, testing regimes simplified and made cheaper, all of this lends to the theory that by the end of the year, we’ll be back in business in some scale,” he said.

Sir Tim then moved on to talk about business travel and said: “Business travel will return in absolute terms, but segments will change. Airlines will have to adapt to the changing nature of demand. An a la carte menu for business class which allows you to pick and choose products at various price points that go with it, is a smart idea.”