Domestic air travel is down 70% and the recovery in the near term is going to be slow, the International Air Transport Association (IATA) said on Tuesday. The IATA once again warned cautioned that it will be difficult for the ailing airlines to return to health without adequate support from the governments.
Countless industries have been impacted by the coronavirus outbreak and airlines seem to be one of the major casualties. Although some governments including the United States, Singapore and Australia, announcing stimulus packages to bail out the cash-strapped airlines, low customer confidence and unwillingness to plan trips might continue to see low air traffic over the next few months.
Domestic travel hits a low
The IATA on Tuesday said that global traffic is down 70% and the recovery over the next six months is likely to be slow because the coronavirus has already done enough damage to the economy and it will take a long time for things to finally fall back in place. Airlines were already suffering and the Covid-19 outbreak has sent it into a tailspin.
The IATA said that the domestic markets for the airlines will open earlier than expected but the damage the coronavirus pandemic has done to the consumer confidence won't allow the industry quick recovery. Not only are airlines slashing hundreds of flights every day, but also thousands of flyers are cancelling tickets.
Factors like low consumer confidence, apprehensions toward planning trips and social distancing measures that are likely to be in effect for weeks, will be headwinds in airlines' quick recovery, said the IATA. Brian Pearce, chief economist with the International Air Transport Association, told journalists on a conference call that recovery will be rather modest in the third quarter.
Can airlines bounce back?
Last week, the IATA had said that global airlines are likely to lose around $314 billion in revenues, raising its earlier estimates of $252 billion provided on March 24. The $314 billion represents a 55 percent fall in passenger revenues compared to the previous year.
Air traffic is on a 10 year low following the coronavirus outbreak. Government measures to contain the spread of the deadly coronavirus has seen people staying at home, which has cut down on air travel and has compelled airlines to cancel hundreds of flights every day. According to the Transportation Security Administration, it screened around 2.5 million passengers every day across the United States in 2019, which has dropped to 90,000 per day in April 2020, a 10-year low.
Also on Tuesday, the IATA and the International Transport Workers' Federation (ITF) issued a joint statement urging governments to come forward and bail out the ailing airlines. "Airlines are facing the most critical period in the history of commercial aviation. Some governments have stepped in to help, and we thank them. But much, much more is needed," said Alexandre de Juniac, IATA's Director General and CEO.
He also said that direct financial support is essential to maintain jobs and ensure that airlines remain viable businesses. Recurring losses over the past few months, which has been deepened following the coronavirus crisis, has seen many airlines going for layoffs and furloughs, while some have grounded their entire fleet.