During September, the pace of improvement in passenger travel moderated as compared to previous months. Although global economic activity continued to rebound, new outbreaks of COVID and additional restrictions in Europe in particular, put pressure on passenger traffic to further slow the recovery. Industry-wide revenue passenger-kilometres (RPKs) declined by 72.8% year-on-year, showing a slight improvement from the 75.2% fall in August. This modest recovery was mostly driven by domestic markets which were down 43.3% year-on-year. International traffic remained relatively stagnant and showed no clear recovery. With demand improving faster than capacity in September, load factors improved slightly and were at 60.1% in September down 21.8 ppts year-on-year.
In September, the aggregated domestic RPKs contracted by 43.3% year-on-year versus the 50.9% year-on-year fall in August. Despite renewed outbreaks in Europe as well as countries such as India and Indonesia, the pace of the rebound mirrored that of August.
Domestic Russia was a key player in driving positive changes in September. For the second consecutive month, RPKs in the domestic Russian market grew year-on-year. Revenue passenger-kilometres were up +2.7% year-on-year in September versus +3.8% in August. Domestic load factors came in at 82.4%. Similar to Russia, the China domestic market returned close to 2019 levels. During the month of September, domestic passenger traffic in China was down by a modest 2.8% year-on-year versus a 18.8% fall in August. Signs that consumer spending and the overall economy have almost returned to normal have resulted in an accelerated pace of recovery for the China domestic market.
While the recovery in traffic in Russia and China is moving forward quickly, there was limited progress In the US and Japan. Domestic RPKs in the US declined by 65.0% year-on-year, showing little improvement versus the previous month’s fall of 69.4%. Likewise, in Japan RPKs contracted by 59.3% year-on-year versus the previous month fall of 68.8%.
Brazil posted encouraging results. Domestically, the pace of recovery improved by 12 ppts month-over-month (MOM) compared to August. RPKs fell 55.3% year-on-year in September, up from -67% in August. Domestic load factors were at 80.7%, which is the second-highest after Russia’s domestic load factors of 82.4%.
While domestic air travel improved in September, international air travel slowed with aggregated international RPKs contracting by 88.8% versus 88.3% year-on-year in August. Europe remained the most resilient international passenger market but renewed infections since late-August caused traffic to fall by 82.5% year-on-year in September versus 80.5% in August.
Although international passenger demand In North America and Latin America, as well as Asia, has recovered slightly, year-on-year traffic decline is still more than 90%. Improvements have been slow and held back by elevated numbers of COVID cases in many countries.
Forward booking data for travel booking suggest that passengers are willing to fly if entry testing is applied rather than quarantine. As a result, many airlines and airports want countries to adopt travel requirements which accept a negative COVID-19 test within 48 hours instead of asking passengers to quarantine upon arrival.
In September the rise in global RPK growth slowed, but cargo accelerated. This was largely driven by export orders for manufactures. The speed of recovery in air cargo increased slightly during the month with Industry-wide cargo tonne-kilometres (CTKs) falling by 8% year-on-year versus a 12.1% decline in August. Looking forward, cargo demand in Q4 is expected to be reasonably solid amid traditionally large e-commerce events and launches of popular consumer electronics. While recovery for the air cargo business has strengthened, the lack of cargo capacity remains a key obstacle for faster recovery. To that point, global available cargo tonne-kilometres fell by 25.2% year-on-year in September.
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Source: IATA Air Passenger Monthly Analysis – September 2020
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