European Air Transport COVID-19 Impacts and Recovery to be Worse than other Regions

The International Air Transport Association (IATA) released new estimates for the impacts of COVID-19 on air transport and economies in Europe in 2020, indicating a further deterioration in revenues, job prospects and economic activity across the entire continent.

Europe is expected to be the worst-hit global region in terms of airline losses. (Photo: supplied)

IATA’s latest economic forecast reveals that in 2021 Europe is expected to be the worst-hit global region in terms of airline losses (-$11.9 billion) and EBIT margin (-9.5%). Passenger traffic (measured in revenue passenger km, RPK) is estimated to have fallen 70% this year, the worst performance of any region with the exceptions of Africa (-72%) and the Middle East (-73%). RPK growth next year is expected to be a weak 47.5%, trailing the comparable regions of Asia Pacific (50%) and North America (60.5%).

“Our projections for this year and next are little short of a disaster for European air transport. Border restrictions and quarantine measures have brought demand to a halt and the region has been affected even worse than most other parts of the world. There is optimism over a vaccine, but as our forecast for next year shows, this is unlikely to come in time to prevent hundreds of thousands more job losses in the industry unless governments take immediate action. The focus must remain on rapid testing of passengers so that quarantine can be eliminated, and borders safely opened,” said Rafael Schvartzman, IATA’s Regional Vice President for Europe.

An in-depth look at the national level impacts reveals that prospects for passenger numbers and industry revenues have declined across the board since the analysis in August. This inevitably feeds into greater numbers of jobs at risk and negative economic impacts. Across Europe as a whole more than seven million jobs have been lost or are at imminent risk due to the COVID-19 shutdown.

The impact of travel restrictions and quarantine on travel demand is clear. Intra-EU bookings are 81% down for the period to 10 January 2021 compared to the usual curve. Economic recovery will be hampered by the loss of connectivity that is being felt by European cities. Since 2019, total connectivity has declined by 68% in Frankfurt, 67% in London, 67% in Paris, 66% in Istanbul, 64% in Moscow, and 53% in Amsterdam.

“We see hope in vaccines, but mass inoculation is still a long way off, so European governments and the European Commission must act quickly to help preserve what remains of the continent’s aviation industry and air transport network. Two priorities stand out at this time. First, remove quarantine restrictions by introducing rapid COVID-19 testing of air passengers. The latest guidance from EASA and ECDC confirms that quarantine is ineffective in the present circumstances. And second, quickly agree a revised slot regulation in line with the joint industry recommendations, in order to preserve air routes and competition. People are desperate to visit far flung families this winter. Businesses are desperate for travelers and trade. And we are all desperate for action from governments to safely restore the freedom to travel,” said Schvartzman.

Cre: IATA

Nguyen Xuan Nghia – COMM