AFRICA – The International Air Transport Association (IATA) announced has passenger demand performance for June 2021 showing a very slight improvement in both international and domestic air travel markets even though demand remains significantly below pre-COVID-19 levels owing to international travel restrictions.
As comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19, unless otherwise noted, all comparisons are to June 2019, which followed a normal demand pattern.
Total demand for air travel in June 2021 (measured in revenue passenger kilometers (RPKs) was down 60.1% compared to June 2019, a small improvement over the 62.9% decline recorded in May 2021 versus May 2019.
International passenger demand in June was 80.9% below June 2019, an improvement from the 85.4% decline recorded in May 2021 versus two years ago with all regions with the exception of Asia-Pacific contributed to the slightly higher demand.
Total domestic demand was down 22.4% versus pre-crisis levels (June 2019), a slight gain over the 23.7% decline recorded in May 2021 versus the 2019 period and performance across key domestic markets was mixed with Russia reporting robust expansion while China returned to negative territory.
“We are seeing movement in the right direction, particularly in some key domestic markets. But the situation for international travel is nowhere near where we need to be. June should be the start of peak season, but airlines were carrying just 20% of 2019 levels. That’s not a recovery, it’s a continuing crisis caused by government inaction,” said Willie Walsh, IATA’s director-general.
African airlines’ traffic fell 68.2% in June versus the same month two years ago, an improvement from the 71.5% decline in May compared to May 2019. June capacity contracted 60.0% versus June 2019, and load factor declined 14.5 percentage points to 56.5%.
IATA data for global air cargo markets for June showed a 9.9% improvement on pre-COVID-19 performance (June 2019) and this pushed first half-year air cargo growth to 8%, its strongest first-half performance since 2017 (when the industry posted 10.2% year-on-year growth).
Global demand for June 2021, measured in cargo tonne-kilometers (CTKs), was up 9.9% compared to June 2019.
“Air cargo is a revenue lifeline for many airlines as they struggle with border closures that continue to devastate the international passenger business”Willie Walsh – Director General, IATA
Regional variations in performance are significant with North American carriers contributing 5.9 percentage points (ppts) to the 9.9% growth rate in June while Middle East carriers contributing 2.1 ppts, European airlines 1.6 ppts, African airlines 0.5 ppts and Asia-Pacific carriers 0.3 ppts. Latin American carriers did not support the growth, shaving 0.5 ppts off the total.
Overall capacity, measured in available cargo tonne-kilometers (ACTKs), remained constrained at 10.8% below pre-COVID-19 levels (June 2019) due to the ongoing grounding of passenger aircraft.
Belly capacity was down 38.9% on June 2019 levels, partially offset by a 29.7% increase in dedicated freighter capacity.
Underlying economic conditions and favorable supply chain dynamics remain highly supportive for air cargo:
The US inventory to sales ratio is at a record low meaning that businesses have to quickly refill their stocks and typically use air cargo to do so.
The Purchasing Managers Indices (PMIs) leading indicators of air cargo demand show that business confidence, manufacturing output and new export orders are growing at a rapid pace in most economies. Concerns of a significant consumer shift from goods to services have not materialized.
The cost-competitiveness and reliability of air cargo relative to that of container shipping have improved. The average price of air cargo relative to shipping has reduced considerably and the scheduling reliability of ocean carriers has dropped, in May it was around 40% compared to 70-80% prior to the crisis.
“Air cargo is doing brisk business as the global economy continues its recovery from the COVID-19 crisis. With first-half demand 8% above pre-crisis levels, air cargo is a revenue lifeline for many airlines as they struggle with border closures that continue to devastate the international passenger business. Importantly, the strong first-half performance looks set to continue,” said Walsh.
African airlines’ international cargo demand in June increased 33.5% compared to the same month in 2019, the strongest performance of all regions, but notably on small volumes (African carriers carry 2% of global cargo).
International capacity in June decreased by 4.9% compared to the same month in 2019.