Demand for international passenger air tickets will not recover until 2024, due in part to the failure of the United States and developing countries to control the COVID-19 pandemic, a global airline industry group says, pushing back an earlier estimate by a year.
People will be slower than expected to resume flying as important markets remain closed, corporate travel budgets are tight and consumer confidence stays low owing to economic hardship or fears of the deadly illness, the Geneva-based International Air Transport Association said in a new forecast on Tuesday.
“All of this points to a longer recovery period and more pain for the industry and the global economy,” IATA chief executive Alexandre de Juniac said in a statement, describing the upturn in ticket sales since the bottom in April as “very weak.”
The recovery in domestic, or short-haul, traffic will happen faster than for international flights, but IATA said this rebound will also be delayed by a year, to 2023. “Some 55 per cent of respondents to IATA’s June passenger survey don’t plan to travel in 2020,” the forecast said.
Seat sales will decline by 55 per cent for all of 2020 compared with 2019, IATA said, updating an earlier forecast for a drop of 46 per cent. A vaccine or other medical advances in treating the illness could hasten the recovery, the outlook added.
The European Union has barred passengers from the U.S., owing to intensifying outbreaks of the virus in many states. U.S. President Donald Trump, who has falsely said the virus will disappear, has been blamed for his lack of action to co-ordinate and lead U.S. efforts to combat COVID-19.
Mark Manduca, a Citigroup stock analyst, said travel to Europe from the U.S. will likely be limited until after the November presidential elections. “The politics simply won’t allow it,” Mr. Manduca said in a research note.
Canada is closed to most visitors and requires any arriving international traveller to self-isolate for 14 days. The government is advising Canadians to avoid non-essential travel to avoid catching or spreading the virus.
Canada’s airlines and other travel industry providers are pressing the government to ease travel restrictions, saying the rules are restraining the recovery and costing jobs.
Montreal-based Air Transat resumed a reduced schedule on 24 domestic and foreign routes on July 23 after a four-month halt. WestJet Airlines Ltd. and Flair Airlines are flying a smaller number of flights than before the pandemic.
Air Canada, which slashed its schedule by as much as 95 per cent as the pandemic took hold, has resumed summer flights to some international destinations, but indefinitely shut down 30 domestic routes and closed operations at eight airports. Porter Airlines and Sunwing Airlines Inc. suspended operations in March and said they plan to resume flying on Aug. 31.
Air Canada, which lost $1-billion in the first quarter of 2020 and is burning through about $21-million a day in expenses, reports its second-quarter financial results on July 31.
Mr. Manduca said the industry’s cash reserves will continue to dwindle amid weak demand for airfares. He called recent efforts by some carriers to add routes “false dawn ramp-ups” that will not succeed in attracting enough travellers.
“This is particularly worrisome as we head into what will likely be one of the economically bleakest of winters,” Mr. Manduca said.
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