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IATA says airline traffic recovery to take longer than expected

In an update on the crisis which has led to a collapse in travel demand, the International Air Transport Association cited slow virus containment in the United States and developing countries, and a weaker outlook for corporate travel outlook.

July 28, 2020 / 07:41 PM IST

Global airlines cut their coronavirus recovery forecast on Tuesday, saying it would take until 2024 - a year longer than previously expected - for passenger traffic to return to pre-crisis levels.

In an update on the crisis which has led to a collapse in travel demand, the International Air Transport Association cited slow virus containment in the United States and developing countries, and a weaker outlook for corporate travel outlook.

Lingering travel barriers and new restrictions in some markets are also weighing on nearer-term prospects, IATA said, cutting its 2020 passenger numbers forecast to a 55 percent decline - sharper than the 46 percent drop predicted in April.

"The second half of this year will see a slower recovery than we'd hoped," IATA Chief Economist Brian Pearce said. June passenger numbers were down 86.5 percent year-on-year, the organisation said, after a 91% contraction in May.

A surprise move by Britain to quarantine arrivals from Spain has created lot of uncertainty, Pearce said. "That is clearly going to be an issue with the recovery."

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Recovery prospects are weakened by the spread of COVID-19 in the United States and developing countries together representing 40 percent of global air travel, IATA said.

Business travel may also face a sustained slump, threatening the profitability of long-haul airlines and routes as corporate clients rein in spending and make greater use of video-conferences that have become the norm during lockdowns.

"It will remain to be seen whether we see a recovery to pre-crisis business travel patterns," Pearce said. "Our concern is that we won't."

Long-haul carriers may need to rely more heavily on cargo to maintain the viability of some routes because of lower business demand, he said.

"For many network airlines, the premium-paying passengers were essentially the ones who drove the profitability."

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Reuters
first published: Jul 28, 2020 07:30 pm

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