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Mideast air traffic to fly back to 45% of pre-Covid levels in 2021

October 22, 2020

Regional travel picked up across the Middle East from the low point in April.

The International Air Transport Association (Iata) said on Wednesday that air travel demand in the Middle East is expected to strengthen to 45 per cent of 2019 levels to reach 90 million travellers to/from/within the region in 2021, but a full return to 2019 level is not expected until late 2024.

Downgrading its traffic forecast for the Middle East for 2020 to reflect a weaker-than-expected recovery, Iata said full-year 2020 passenger numbers in the Middle East are forecast to reach only 30 per cent of 2019 levels, down significantly from the 45 per cent that was projected in July.

In absolute numbers, the Middle East is expected to see 60 million travellers in 2020 compared to the 203 million in 2019, the global airlines apex group said.

In an earlier forecast, Iata said the extended impact of the pandemic on the Gulf and Middle East aviation sector would mean about 1.7 million jobs being lost this year itself. Out of that, 323,000 jobs will be lost in aviation alone, which is about 46 per cent of the region's total aviation-related jobs.

Regional travel picked up across the Middle East from the low point in April as countries in the region re-opened their borders, but international travel has remained heavily constrained owing to the return of government restrictions in the face of new Covid-19 outbreaks in a number of key markets. Forward bookings for air travel in the fourth quarter show a much slower recovery than had been expected previously.

'The slower than anticipated return to the skies for travellers in the Middle East is more bad news for the region's aviation industry. A few months ago, we thought that a fall in passenger numbers to 45 per cent of 2019 levels was as bad as it could get,' said Muhammad Albakri, Iata's regional vice-president for Africa and the Middle East.

'But the second wave, combined with continuing travel restrictions and quarantines, will result in passenger numbers in the region being less than a third of what we had in 2019. This heightens the urgency for governments to adopt systematic Covid-19 testing to restart travel and curb the economic devastation that is being caused because people cannot travel.'

Early this month, Iata warned that world's airlines are bleeding cash at a rate of around $300,000 per minute or $13 billion per month, which could force large swathes of the industry into bankruptcy within months. With traffic levels set to remain stunted through 2021, Iata believes carriers will continue to burn cash next year, at a rate of $5-6 billion a month, collectively - even assuming that a Covid-19 vaccine is discovered.

'The crisis is growing longer and deeper than anyone could have imagined,' warned Iata director-general Alexandre de Juniac. 'And the initial support programmes are running out. Today we must ring the alarm bell again. If these support programmes are not replaced or extended, the consequences for an already hobbled industry will be dire.'

Lowering its estimates for revenue passenger-kilometres, the airline association now expects December traffic levels to be 68 per cent lower than last year, against a 55 per cent reduction that it forecast in July. It does not see sector profitability returning until 2022.

From examining the available cash and liquid assets of carriers in their six-month reports to the end of June, Iata found that on average airlines had enough funding to last just eight-and-a-half months, taking them to halfway through February 2021.

He said government support for the entire sector is needed as the impact has spread across the entire travel value chain including airports and air navigation infrastructure partners who are dependent on pre-crisis levels of traffic to sustain their operations.

A failure to invest in the sector not only threatens the aviation industry, but the 10 per cent of global economic activity that is linked to it, said de Juniac. Combined, aviation supports 46 million jobs across the world and $1.8 trillion in economic activity, Iata estimates.