Mubasher: Air travel shrank by 98% year-on-year (YoY) in April 2020 as countries closed their borders in an attempt to contain the spread of the coronavirus (COVID-19) pandemic.
While the airline industry was gearing up to witness a surge in passengers, with the International Air Transport Association (IATA) forecasting 8.2 billion air travellers in 2037, airlines are projected to lose $84 billion in 2020, chief economist for IATA, Brian Pearce told CNBC on Thursday.
“We’re really only just starting to see countries negotiating bilateral openings of markets. For example, the Trans-Tasman bubble between Australia and New Zealand, China and Singapore, as well as China and Korea,” he continued.
Still, however, a recovery is likely in the second half (H2) of 2020, Pearce said.
Government assistance is considered key to ensuring the continuity of airlines, said the head of the Centre for Air Transport Management at Cranfield University, Keith Mason.
“We’re going to see a consolidation in the market where airlines that are fully independent are struggling to survive, are going to go out of business,” he said to CNBC.
Moreover, business travel may lose 1 in 5 trips as the pandemic’s financial impact may leave the world with a smaller airline industry, leading prices to drive up and demand to weaken, Mason assumed.
On a more positive note, IATA in partnership with the Airports Council International developed a recovery roadmap recommending the best end-to-end measures for safely resuming flights. This includes contact tracing, the use of personal protective equipment, and enabling contactless services at customs.