2020 turns out to be worst year in aviation history with sharpest decline in demand

By Megha Paul On Feb 5, 2021

Guest Contributor

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According to the International Air Transport Association (IATA) in 2020 demand (revenue passenger kilometers or RPKs) fell by 65.9% compared to 2019, which is by far the sharpest traffic decline in aviation history. Furthermore, forward bookings have been falling sharply since late December.

International passenger demand in 2020 was 75.6% below 2019 levels. Capacity, (measured in available seat kilometers or ASKs) declined 68.1% and load factor fell 19.2 percentage points to 62.8%. Domestic demand in 2020 was down 48.8% compared to 2019. Capacity contracted by 35.7% and load factor dropped 17 percentage points to 66.6%.

December 2020 total traffic was 69.7% below the same month in 2019, little improved from the 70.4% contraction in November. Capacity was down 56.7% and load factor fell 24.6 percentage points to 57.5%.

Bookings for future travel made in January 2021 were down 70% compared to a year-ago, putting further pressure on airline cash positions and potentially impacting the timing of the expected recovery.

IATA’s baseline forecast for 2021 is for a 50.4% improvement on 2020 demand that would bring the industry to 50.6% of 2019 levels. While this view remains unchanged, there is a severe downside risk if more severe travel restrictions in response to new variants persist. Should such a scenario materialise, demand improvement could be limited to just 13% over 2020 levels, leaving the industry at 38% of 2019 levels.

“Last year was a catastrophe. There is no other way to describe it. What recovery there was over the Northern hemisphere summer season stalled in autumn and the situation turned dramatically worse over the year-end holiday season, as more severe travel restrictions were imposed in the face of new outbreaks and new strains of COVID-19.” said Alexandre de Juniac, director general and CEO in IATA.

Asia-Pacific airlines’ full-year traffic plunged 80.3% in 2020 compared to 2019, which was the deepest decline for any region. It fell 94.7% in December amid stricter lockdowns, little changed from a 95% decline in November. Full year capacity was down 74.1% compared to 2019. Load factor fell 19.5 percentage points to 61.4%.