Global air travel unlikely to recover until 2024 as COVID remains 'issue' in US, elsewhere
The prognosis for airlines keeps getting worse. The latest comes from the International Air Transport Association, where the organization's latest forecast now pushes a recovery to pre-coronavirus pandemic levels off by at least a year.
IATA, the trade group representing airlines globally, does not expect the number of flyers to return to 2019 levels until at least 2024, the organization's chief economist Brian Pearce said Tuesday. The group previously forecast a 2023 recovery.
"Ahead of any vaccine, it really does depend on how well countries manage to control the virus," said Pearce. "That is clearly going to be an issue with the recovery. What we haven’t seen is the sort of progress that we need."
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IATA is just the latest to push back its timeline for a recovery in air travel. In recent weeks, Goldman Sachs and other Wall Street banks have done the same, though most anticipate that at least domestic travel could recover by around 2023.
In the U.S., the recent resurgence of COVID-19 infections particularly in states across the South and West — plus new travel restrictions — has taken a bite out of the nascent recovery. Since the beginning of July, data from trade group Airlines for America (A4A) shows net passenger bookings — new reservations minus cancellations — holding steady at down around 80% compared to 2019 levels.
American Airlines, Delta Air Lines and United Airlines and others have all acknowledged this and have begun to pare their schedules for August and into the fall. Even Southwest Airlines, which had planned to fly a nearly "full" schedule by year-end, now plans to be about a quarter smaller by December compared to the end of 2019.
Related: Air travel recovery may come slower than expected
In addition to the trajectory of the pandemic, IATA cites traveler confidence as an important driver of air travel recovery. COVID-19 has depressed both business and consumer confidence, with the added stress of economic malaise and rising unemployment dragging down the latter, Pearce said.
The U.S. unemployment rate stands at over 11%, which is historically high and above the 10% rate hit during the Great Recession.
There is some hope. Hard-hit JetBlue Airways, which flies primarily along the East Coast — a market that Cowen analyst Helane Becker has nicknamed "quarantine corridor" — expects many of the these markets to come back strong when restrictions ease and travelers return.
Related: JetBlue says flyers want empty middle seats, international flights coming to LAX
"When these regions stabilize, we expect they will support our recovery given the pent up demand we saw for travel," JetBlue president Joanna Geraghty said Tuesday, speaking about the airline's flights between the Northeast and Florida and as well as its transcontinental routes.
However, JetBlue plans to be roughly a third smaller than it was last year at the end of December, and is preparing to be a smaller airline after the pandemic.
“There is some [potential] upside but we do think that the bulk of the uncertainty, the risks are probably more on the downside over the next few years," Pearce said about IATA's forecast.
Related: United Airlines worries travel recovery will stall until there’s a COVID vaccine