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IATA Blames “Slow Virus Containment in The U.S.” In-Part For Poor Aviation Outlook

passenger plane fly up over take-off runway from airport at sunset

The International Air Transport Association is blaming local responses to COVID-19 for the continued depression among the airline industry. The trade organization now says carriers may not see pre-pandemic passenger loads until 2024.

The world’s airlines are much more pessimistic about a recovery, due in part to the continued spread of COVID-19 within the United States. The new data comes from a report by the International Air Transport Association, which projects airlines may not get pre-COVID passenger levels until 2024.

U.S. Virus Trends, Reduced Corporate Travel and Weak Consumer Confidence All Factors

From a global perspective, airline passenger traffic as measured in revenue per kilometer was down 86.5 percent compared to the same time in 2019. Although there was some improvement, it was insignificant compared to May 2020, when global traffic was down 91 percent compared year over year.

Global airline performance continued to remain catastrophically low in June 2020, due to the COVID-19 pandemic. Image courtesy: IATA

Global airline performance continued to remain catastrophically low in June 2020, due to the COVID-19 pandemic. Image courtesy: IATA

The IATA report says their negative outlook is now based on three different factors, lead by the increase of COVID-19 cases in the United States. Because a major portion of international travel demand comes from Americans and other major economies, the steady increase in infections and regional lockdowns are creating major problems for an aviation recovery.

“Although developed economies outside of the U.S. have been largely successful in containing the spread of the virus, renewed outbreaks have occurred in these economies, and in China,” a press release from IATA reads. “Furthermore, there is little sign of virus containment in many important emerging economies, which in combination with the US, represent around 40% of global air travel markets. Their continued closure, particularly to international travel, is a significant drag on recovery.”

The United States’ response to COVID-19 isn’t the only situation bringing airline recovery projections down. As corporations turn to virtual solutions for meetings and seminars, the critical business travel sector is expected to suffer. IATA projects companies will cut their travel budgets as they look to improve their margins beyond the pandemic.

Finally, weaker consumer confidence will also hurt the global airline industry. Although the trade organization says the demand for leisure travel is building, the lack of job security and unemployment benefits have would-be airline customers conserving cash for a rainy day.

Passenger traffic hit bottom in April, but the strength of the upturn has been very weak,” IATA director general and CEO Alexandre de Juniac said in a press release. “International markets remain largely closed. Consumer confidence is depressed and not helped by the UK’s weekend decision to impose a blanket quarantine on all travelers returning from Spain. And in many parts of the world infections are still rising. All of this points to a longer recovery period and more pain for the industry and the global economy.”

IATA Calls on Governments to Have a Stronger Response to COVID-19 Beyond Quarantines

If the aviation industry is to recover, the IATA says governments need to come up with better solutions than travel bans. Four airlines have already called upon both the U.S. government and European Commission to work out a plan to open borders to air travelers before the end of the year.

“Most countries are still closed to international arrivals or have imposed quarantines, that have the same effect as an outright lockdown,” de Juniac said in the press release. “Summer — our industry’s busiest season — is passing by rapidly; with little chance for an upswing in international air travel unless governments move quickly and decisively to find alternatives to border closures, confidence-destroying stop-start re-openings and demand-killing quarantine.”

In the latest European Commission closed border recommendation list, the United States was still excluded, alongside Brazil, Russia, and many other nations considered persona non grata. The trade bloc was joined by The Bahamas in closing borders to American travelers in July 2020.

13 Comments
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KRSW July 31, 2020

Nice to see IATA completely ignoring the second waves/spikes which are occurring in just about every country. Ask Germany, Australia, and just about any country in 2 weeks from now about this. Also no mention about how the US basically claims anyone who dies with a positive COVID test died BECAUSE of COVID, even if they died because of a motorcycle accident. No mention that the serology tests in the USA will give false positives if you've been exposed to common cold viruses in the past 12 months either. Ms. KRSW works for a large health insurer in the USA, after working at a large hospital for over a decade. The data has been very interesting to say the least, especially since US providers get a 20% bonus for treating anyone who tests positive for COVID per CMS guidelines. Broken arm? COVID. Got shot in Chicago? COVID. Tons of claims with doctors claiming "presumed positive" without doing the tests. Even if you IGNORE NY/NJ/MA's decisions to send COVID patients into nursing homes which killed thousands, using ventilators inappropriately which caused thousands more deaths, and the claiming that everyone who ever dies has COVID, the US' death rate is waaay down the list compared to most European countries. COVID Deaths per 1M population (as of 31 July 2020 from Worldometers): Belgium - 849 UK - 677 Spain - 608 Italy - 581 Sweden - 568 USA - 469 France - 463 COVID Deaths per Million, US breakdown: New Jersey: 1789 New York: 1684 Massachusetts: 1247 Connecticut: 1243 ... Florida: 307 Georgia: 346 Texas: 231 The numbers certainly look a lot different than what you hear the media talking about, don't they? @tobegold: Vaccines work by the same principles as herd immunity. Even Faucci himself said that the best immunity is naturally-acquired immunity. If herd immunity doesn't work, vaccines won't work either.

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AJNEDC July 31, 2020

The USA is just one country. People should fly elsewhere.

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BMGRAHAM July 31, 2020

tobegold actually Sweden is now turning out to be a success story. Read the latest news. Their strategy was the right one.

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edgewood49 July 29, 2020

jenib canyon let us know which country you live in? I am not sure you're correct in saying that Americans are the only ones making things political but then we are America and free. Having said that since YOUR making this political all one has to do is look at news coverage internationally to see few if any are non political when it comes to issues.

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tobegold July 29, 2020

I get a laugh at some of the extremist comments made by some people in the US, no wonder the US is in such a mess. Covid 19 is not just a killer, many survivors are experiencing long term health complications, a recent report listed about 25% have developed serious heart, lung and/or other issues. The herd immunity approach failed - look at Sweden. only after an effective vaccine is available and the majority of the population is vaccinated will the pandemic end.