Air Travel’s 2021 Rebound Threatened by Virus Flares, IATA Says

(Bloomberg) -- Forecasts for a significant recovery in air travel this year could be wide of the mark as new coronavirus strains extend travel restrictions, according to the airline industry's trade body.

Passenger traffic may improve by only 13% compared with last year in a worst-case scenario, the International Air Transport Association said Wednesday. That compares with an official forecast of a 50% rebound issued in December.

Tough curbs on cross-border trips in response to new Covid-19 flareups could stifle a recovery despite strong pent-up demand, IATA Chief Economist Brian Pearce said in a media briefing. Herd immunity may be required before restrictions are eased, something that could be delayed by the identification of new viral strains.

“There's a recovery, but it's a much smaller recovery,” Pearce said. “What we've seen in recent weeks is governments taking a much, much tougher, more cautious approach.”

Passenger traffic fell by almost two thirds last year compared with 2019, IATA said. While the steepest drops came in April, the re-imposition of lockdowns meant the December figure was 70% lower, extending to 85% on international routes. Cargo demand fared much better, sliding only 11%.

Should the lower estimate for a 13% improvement come to pass, that would equate to 38% of the level seen before the pandemic, IATA said.

As a result, IATA Director General Alexandre de Juniac said carriers may require as much as $80 billion more in government funding to survive the year.

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