Pre-COVID-19 travel demand unlikely to return before 2022; Etihad CCO

As airlines slowly return to services following lockdowns imposed by governments around the world, travel demand will take a long time to pick up again, a senior official at Etihad has said.

“The reality is that the repercussions of COVID-19 will likely be felt in our industry for a very long time. At a minimum, travel demand may not return to what it was before this pandemic until the back end of 2021 and most probably, and highly likely into the later part of 2022.”

According to the International Air Transport Association (IATA), Middle East airlines solely face expected income losses of $24 billion this year due to the influence of the pandemic. The UAE alone could see 31 million fewer passengers, resulting in a $6.8 billion revenue loss. The global body is also cautious in its recovery forecasts.

As per a baseline outline, in 2021, IATA expects global traveler demand to be 24 percent below 2019 levels and 32 percent lower than IATA’s October 2019 forecast for the year.

“We don’t expect 2019 levels to be exceeded until 2023,” IATA representative said.

In a more pessimistic situation, if lockdowns continue into Q3 possibly due to a second wave of the virus, passenger demand in 2021 could be 34 percent lower than 2019 levels and 41 percent below IATA’s earlier forecast for 2021.

“Major stimulus from governments combined with liquidity injections by central banks will boost the economic recovery once the pandemic is under control. But rebuilding passenger confidence will take longer. And even then, individual and corporate travellers are likely to carefully manage travel spend and stay closer to home.”

The UAE had suspended all scheduled international flights in late March, with only repatriation and cargo services in place. Some of those restraints are gradually lifting. Etihad, which has returned to service with flights to certain destinations, has been running special passenger, freight and cargo services since travel restrictions began.

Looking ahead, Kamark expects international passenger routes to reopen slowly.

“We foresee a gradual resumption to normal operations, starting off with countries within the Gulf region followed by key international cities across the globe,” Mr. Kamark said.

“Aviation will return to growth but the question is when. Previous volumes will pick up but it will take considerable time based on the effects we have seen so far.”