Air Passenger Forecasts: 2020 Falls, Expected Recovery and - - PowerPoint PPT Presentation

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Air Passenger Forecasts: 2020 Falls, Expected Recovery and - - PowerPoint PPT Presentation

Aug 30, 2022 162 likes •367 views

Air Passenger Forecasts: 2020 Falls, Expected Recovery and Long-RunOpportunities David Goodger Andrew Matters Managing Director, EMEA Deputy Chief Economist Tourism Economics IATA dgoodger@oxfordeconomics.com mattersa@iata.org April 2020

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April 2020

Air Passenger Forecasts: 2020 Falls, Expected Recovery and Long-RunOpportunities

David Goodger Managing Director, EMEA Tourism Economics dgoodger@oxfordeconomics.com Andrew Matters Deputy Chief Economist IATA mattersa@iata.org

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Global lockdowns are having a very large impact on economy and travel

60 100 Present Past China Italy Spain France Germany US (specific states) UK India Australia Japan Other

Global lockdowns

20 40

Source : Oxford Economics/Haver Analytics

80 % of global GDP

16% 63%

Source: IATAEconomics usingFlightRadar24 data

Questions: Use the question panel on the right

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Immediate economic impact will be greater than during GFC

2 4 Non-China EM q/q contribution (RHS) China q/q contribution (RHS) Advanced economies q/q contribution (RHS) Global % quarter (LHS)

  • 2
  • 4
  • 6
  • 8

2004 2006 2008 2010 2012 2014 2016 2018 2020

Source : Oxford Economics/Haver Analytics

World: GDP

% quarter Forecast

Questions: Use the question panel on the right

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Policy stimulus is providing vital support for recovery

  • 1.5
  • 2.0
  • 1.0

2.0 1.5 1.0 0.5 0.0

  • 0.5

2.5 2000 2005 2010 2015 2020 Advanced Economies Emerging Markets World

Source : Oxford Economics/Haver Analytics

Global: Fiscal impulse

Ppts of potential GDP Forecast

Questions: Use the question panel on the right

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Expected growth in recovery but impacts will be felt into the medium term

2020 2021 2022 10% 8% 6% 4% 2% 0%

  • 2%
  • 4%
  • 6%

Global US Eurozone China 2019

Source: Oxford Economics

2022 GDP relative to pre-recession trend Global GDP Outlook

Annual growth, % Questions: Use the question panel on the right

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Travel will fall more sharply than the wider economy

2022 2023

  • 60%
  • 40%
  • 20%

0% 20% 40% 60% Total International Domestic 2020 2021

Source: IATA, TourismEconomics

Global Air PassengerGrowth

Annual growth, % 2022 2

  • 60%
  • 40%
  • 20%

0% 20% 40% 60% 2020 2021

Source: IATA, Tourism Economics

Questions: Use the question panel on the right

Global Air Passengers Relative to 2019 Levels

Annual growth,%

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The dramatic fall in the number of flights has occurred across all regions

Source: IATAusingFlightRadar24 data

Questions: Use the question panel on the right

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The typical airline had 2mths of cash available at the start of the year

Source: IATA, The AirlineAnalyst

Questions: Use the question panel on the right

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Outside the top-30 airlines, debt levels remain high

Source: IATA

Questions: Use the question panel on the right

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The usual v-shape recovery didn’t involve a global recession

120 110 100 90 80 70 60 50 40 30 20 10

  • 3
  • 2
  • 1

1 8 9 10 11 12

Impact of past disease outbreaks on aviation

Index (crisis month=100)

2 3 4 5 6 7

Months before and after the start of the crisis

SARS(2003) AsiaPacific Airlines RPKs AvianFlu (2013) AsiaPacific Airlines RPKs MERS Flu(2015) RPKsto,from and within South Korea AvianFlu (2005) RPKsto,from and within South-EastAsia SARS(2003) NorthAmerican Airlines RPKs SARS(2003) China DomesticMarket RPKs

Source: IATA

Questions: Use the question panel on the right

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Restoring passenger confidence will be crucial

22% 45% 23% 7% 3% 14% 47% 28% 8% 4%

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Not wait at all Wait a month or two Wait six months or so Wait a year or so Not travel for the foreseeable future

Returning to Travel After ContainmentAnnouncement February Survey AprilSurvey

Source:IATA

Questions: Use the question panel on the right

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Downside risk from larger and longer lockdown disruption

105 100 95 90 85 110 115 120 t-4 t t+4 t+8 t+12 t+16

Great Financial Crisis (GFC) Pre-GFC baseline (Jan 2008) Current baseline Pre-coronavirus baseline (Jan 2020) Downside scenario Source : Oxford Economics/Haver Analytics

Global: comparing the forecast and GFC

Index (quarter prior to recession, t=100)

Questions: Use the question panel on the right

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Oct Nov Dec 0% 2% 4% 6% 8% 10% 12% 14% 16% MEA N America Europe APAC Latin America Jan Feb Mar Apr May Jun Jul Aug Sep

Global arrivals: average monthly seasonality

%shareannual arrivals,2013-18

Expected impacts in 2020 will be affected by duration and seasonality

  • Extent of restrictions into H2 will

influence 2020 performance, aswell as sentiment and economic drivers.

  • Current travel restrictions are expected

to remain foraround 4 months.

  • Some easing of restrictions for domestic

and short-haul travel is expected to begin for peak summermonths.

  • Second wave of outbreakand

lockdowns are a key risk.

Source: UNWTO, Tourism Economics

Shading is expected duration of travel restrictions:dark shading is current restrictions,lighter is some easing

Questions: Use the question panel on the right

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Downside scenario from economic drivers and reduced propensity to travel

2022 2023

  • 60%
  • 40%
  • 20%

0% 20% 40% Baseline Downside 2020 2021

Source: IATA, TourismEconomics

Global Air Passenger Downside Scenario

Annual growth, % 2020 2021 2022 2023

  • 60%
  • 40%
  • 20%

0% 20% 40%

Source: IATA, Tourism Economics

Global Air Passenger Scenarios Relative to 2019Levels

Annual growth, % Baseline Downside

Cumulative loss over 5 years: 1.6bn passenger journeys Pre-crisis level recovered a full year later (2023 vs 2022). Questions: Use the question panel on the right

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Regional profiles are similar with AsPac & AME recovering quickest…

Source: IATA/TourismEconomics

Questions: Use the question panel on the right

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The long-run outlook remains robust…

Source: IATA/TourismEconomics

Questions: Use the question panel on the right

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…with Asia Pacific continuing to lead the way

NorthAmerica 522m 2.2% LatinAmerica 365m 3.4% Europe 636m 2.2% MiddleEast 274m 4.4% Africa 209m 4.4% Asia Pacific 2,725m 5.0%

Source: IATA/TourismEconomics

Questions: Use the question panel on the right

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