A resurgence in Covid-19 cases in various regions and a failure by governments to coordinate on travel restrictions and quarantines have frustrated the airline industry’s recovery efforts, leading to “disappointing” traffic gains in July, according to officials from the International Air Transport Association. Speaking during a Tuesday press briefing, IATA chief economist Brian Pearce lamented a continuing lack of consumer confidence—as opposed to quite strong confidence in the business community—as another major contributor to the weaker-than-expected recovery even in domestic markets, with the notable exception of China. Meanwhile, international travel remains stubbornly weak, reflected in a 91.9 percent decline compared with the same month in 2019.
“I was hoping that today we could report a strong northern summer season and with a clear vision to a recovery for aviation,” remarked IATA director general Alexandre de Juniac. “Unfortunately, as Brian has presented, that is far from the industry’s reality today. Borders are largely closed. And government management of travel restrictions is so unpredictable and uncoordinated that people are still not flying.”
During the briefing, de Juniac referenced a three-point action plan for governments to safely reopen borders led by a universal application of the International Civil Aviation Organization (ICAO) Council’s Aviation Recovery Task Force (CART) takeoff guidance. The plan develops a common framework for states to use in coordinating the re-opening of their borders to aviation. IATA also called for accurate, speedy, and scalable testing measures the industry can adopt to boost traveler confidence and promote the lifting of quarantine requirements.
Separately, de Juniac reiterated IATA's call for governments to provide financial aid without adding to the debt burden of airlines and for a global waiver on the so-called use-it-or-lose-it 80-20 slot rule. Already suffering from poor load factors as tepid demand fails to support increased capacity, airlines can ill-afford to operate “ghost” flights simply to retain their slots they would otherwise lose due to lack of use.
“The severe uncertainty in the market means that airlines need the flexibility to adjust schedules to meet demand without the pressure of being penalized for not using allocated slots,” said IATA in a statement. “Airlines cannot afford to fly empty planes when market demand drops. Similarly, they cannot pass up revenue when opportunities open up.”
Even as China, Brazil, Mexico, Singapore, Australia, and New Zealand have granted slot waivers for the 2020 winter season, which runs until March 2021, the European Commission continues, in IATA’s words, to drag its feet. “Unfortunately, the European Commission (EC), which many governments look to for leadership on air transport policies, is underestimating the severity of the crisis,” said IATA, which argued that the EC’s projection for the winter season of a 75 to 85 percent restoration in traffic from February 2020 levels will prove “far more optimistic than industry scenarios.”