Future of Aviation: Beyond COVID or With COVID? - Kelvin Lee Assistant Director Member & External Relations IATA Asia-Pacific
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Future of Aviation: Beyond COVID or With COVID? Kelvin Lee Assistant Director Member & External Relations IATA Asia-Pacific 27 August 2021
Every passengers flights value of goods
day in … (millions) carried
(billions)
2019 12.4 106,600 $17.8
2020 4.9 44,900 $16
Source: IATA
2
Current situation
Fear of new Worsening
COVID variants domestic situation
Worsening border restrictions impacting international travel
Slower than
expected Vaccine
vaccination hesitancy
3
International air services remain near to lows
March 2021 routes only 50% of normal, frequencies only 48% of normal
International airport-pair routes, average flights per month
45 30,000
40 Average flights per
month 25,000
Flights per month per route
35
March 2021: 20 or
Airport-pair routes
30 48% of March 2019 20,000
25
15,000
20
15 10,000
10 Airport-pair routes
March 2021: 11,730 or 5,000
5 50% of March 2019
0 0
4 Source: IATA Economics using data from SRS Analyser
Travel restrictions hurting quality of life
Quality of life has suffered as a Personal impact of COVID-19 travel restrictions
result of travel restrictions (select all that apply)
11%
Feeling the loss of freedom that
comes with flying 42%
27%
Unable to see family members 41%
22%
Missing a key human moment
(wedding, funeral, family etc.) 36%
Mental stress of feeling
contained/isolated 33%
Unable to do business normally 32%
40% Inability to connect with other
Agree strongly Agree somewhat people in my professional field 30%
Disagree somewhat Disagree strongly
Q28. Which of the following impacted you personally as a result of COVID-19 travel restrictions?
5 Q26. Do you agree strongly, agree somewhat, disagree somewhat or disagree strongly with each of the following statements?
Two thirds planning an early return to travel
How long will travelers wait to travel once pandemic is contained
Not wait at all 20%
Wait a month or two 37%
Wait six months or so 28%
Wait a year or so 12%
Not resume my usual travel plans for the
foreseeable future 4%
Q12. Once the pandemic has been contained, how long would you wait, if at all, to return to your usual travel plans?
6 *Note that the wording of this question has changed slightly since it was asked in the April 2020 wave of this survey.
Majority won’t travel if there’s a chance of quarantine
I will not travel if there is a chance I
may be quarantined at my 48% 37% 85%
destination
Agree strongly Agree somewhat
NB Numbers may not always add up due to rounding.
7 Q13. Do you agree strongly, agree somewhat, disagree somewhat or disagree strongly with the following statement?
Frustration with continued travel restrictions
COVID-19 will not disappear so we need to manage its risks
while living and traveling normally 38% 45% 84%
I am frustrated by COVID-19 air travel restrictions 27% 36% 63%
We know enough about COVID-19 risks to be able to travel
without restrictions 24% 35% 59%
I think the air travel restrictions go too far 23% 29% 52%
Agree strongly Agree somewhat
NB Numbers may not always add up due to rounding.
Q24. When it comes to the COVID-19-related air travel restrictions in your country, do you agree strongly, agree somewhat, disagree
8 somewhat or disagree strongly with each of the following?Setting targets and planning to re-open borders
When it comes to opening borders, we need to find the
right balance between managing COVID-19 risk and 36% 49% 85%
getting the economy going again
Governments should set COVID-19 targets (such as
testing capacity or people vaccinated) to re-open borders 32% 52% 84%
Country borders should be opened progressively as
COVID-19 cases decrease 28% 52% 80%
Border closures should end as testing and vaccine
capacity increases 25% 45% 70%
Agree strongly Agree somewhat
NB Numbers may not always add up due to rounding.
9 Q26. Do you agree strongly, agree somewhat, disagree somewhat or disagree strongly with each of the following statements?Multi-layered measures to address COVID risks
COVID-19
Multi-
likely to
layered
become approach
endemic
No zero-risk
way to
Risk Risk
reopen to
modelling modelling
borders
understand
impact
10Vaccines and Air Travel
Implement
digital
Waiting for full
Governments IATA supports vaccination
Travel cannot be vaccination
should prioritize unrestricted certificates
limited to before
aviation for access to travel based on WHO
vaccinated reopening
access to for vaccinated and ICAO
passengers borders not an
vaccines travelers standards for
option
international
travel
11Testing and Air Travel
Standardized Acceptance of
Insufficient testing Costly and
digital testing IATA Travel Pass
capacity slow testing
certificates framework
for both departing such that it impacts to facilitate mutual for a digital solution
and arriving end-to-end acceptance in processing
passengers to meet passenger testing/vaccination
future travel demand experiences certificates
12Timatic Contactless app
App to manage &
Worldwide
share biometric
COVID rules
identity and health
and regulations Modular credentials
Interoperable
ICAO DTC
W3C Standards
Lab Solutions
Labs available
nearby that can
get testedIATA Travel Pass - Contactless Travel
Enable Contactless Travel
where passengers can create Digital
a digital version of their Passport
passport, and share with
airlines, airports and border
authorities.
= +
Passengers can proceed Boarding
through the airport using Pass
their face as their passport
and boarding pass.
14Structural change in aviation driven by the supply-side
Technology, liberalization & innovation drove unit costs down 90%
Unit cost of air transport, US$/ATK, inflation-adjusted
4.0
Boeing 707
US$ in 2017 prices to fly a tonne kilometer
3.5
3.0
2.5
1973
oil US airline market
2.0 crisis deregulation
1.5 EU airline market
deregulation
Great Recession
1.0 COVID-19
0.5
0.0
15 1950 1960 1970 1980 1990 2000 2010 2020
Source: IATA Economics using data from ICAO, IATA Statistics and OECDNeed for market stimulation by Governments
• $173 bn provided in aid but
more aid needed • Support faster recovery
• Advances in testing and • Avoid distortion of
vaccines but bookings still competition by being
low available to all airlines
• Airlines not cash positive Market
Current • Boost demand and benefit
until Q4 2021 Stimulation entire aviation value chain
Risks
• Risk of widespread failures Benefits • Benefit passengers and
and inability to support local economies
economic recovery
• Easy application /exit for
• Urgent need to reopen governments
borders and stimulate
demand
16Proven market stimulation options and benefits
Advance Passenger
Charges, Route Flight/ seat
payment/ travel
taxes and fees subsidies incentives
vouchers subsidies
Improve Connect rural Travelers multiply Kick start markets Help affordability
affordability of communities and investment through and provide direct and generate
travel businesses; revive money spent in the benefits to benefits for tourism
tourism economy passengers and economy
Lower ‘external’ Can operate routes Support low load More stability in Lower overall cost
costs boost even if unviable on factor/yield flights bookings and of travel boosts
demand commercial terms support for cash demand
flow
17RPKs will recover to 2019 levels in 2023 18 Source: IATA/Tourism Economics Air Passenger Forecast, April 2021 update
Air travel demand to rise above 7bn in the next 20 years
Passengers (billion, O-D basis)
9
Scientific advances scenario Vaccine ineffectiveness scenario
8
Baseline scenario
7
7.3bn
6
5
4
3
2
1
0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039
Source: IATA/Tourism Economics, Air Passenger Forecasts April 2021
1920
Top 10 air passenger markets 2019-39 21 Source: IATA/Tourism Economics, Air Passenger Forecasts April 2021 19 August 2021
In summary
Aviation
COVID-19 Catalyst for
needs
likely to advances in
support for
become technology
recovery
endemic
and growth
22Thank you
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