Load factor lowest among African airlines, industry could take till 2024 to recover

  • The airline industry will likely only recover to pre-Covid-19 global passenger traffic by 2024, according to the the International Air Transport Association.
  • African airlines' traffic sank 98.1% in June compared to June last year and capacity contracted 84.5%.
  • About 55% of respondents to IATA's June passenger survey don't plan to travel in 2020.

The airline industry will likely only recover to pre-Covid-19 global passenger traffic by 2024, the International Air Transport Association (IATA) said on Tuesday.

African airlines' traffic sank 98.1% year-on-year in June, a small change from a 98.6% demand drop in May compared to June and May last year. Capacity contracted 84.5%, and the load factor dived 62.1 percentage points to just 8.9% of seats filled. This is the lowest load factor among all global regions.

In terms of lockdown rules currently in place in South Africa, there are no international commercial flights allowed and domestic flights only for business travel purposes.

South African Airways is currently in business rescue, as well as Comair, which owns Kulula.com and flies British Airways domestically in terms of a licence agreement. State-owned regional airline SA Express is in provisional liquidation.

SAA subsidiary Mango, FlySafair and Airlink started with domestic flights in June.

Downward revision

IATA has, therefore, revised its five-year outlook for the global airline industry, after it initially expected pre-Covid-19 traffic to return by 2023.

It also expects short-haul, mainly domestic traffic, to recover to 2019 levels only in 2023 and not 2022 as it had previously forecast.

Global passenger traffic during June 2020 remained 86.5% lower than in the same month in 2019.

Africa worse off

In Africa, the situation for the continent's airlines is more critical, with traffic down more than 98% compared with the same period last year. The depressed traffic volumes are a direct result of the pandemic and lockdown restrictions imposed to slow the rate of infections and deaths from the virus.

The more pessimistic recovery outlook by IATA is based on a number of recent trends. These include the slow virus containment in the US and developing economies; reduced corporate travel, with video conferencing appearing to have made significant inroads as a substitute for in-person meetings; and weak consumer confidence. For example, about 55% of respondents to IATA's June passenger survey don't plan to travel in 2020.

"Passenger traffic hit bottom in April, but the strength of the upturn has been very weak. What improvement we have seen has been domestic flying. International markets remain largely closed," commented Alexandre de Juniac, IATA's director general and CEO, in a statement.

"Consumer confidence is depressed 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."

He said for airlines, this is bad news that points to the need for governments to continue with relief measures — financial and otherwise. In South Africa, there has not been airline-specific Covid-19 relief.

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