Health concerns “remain paramount” among potential travellers, with Europe the only market to defy a global freeze on international travel, according to airline association Iata.
Global air traffic remained 80% down year on year in July and international traffic 92% down, Iata reported this week.
Iata chief economist Brian Pearce said the rise in traffic on April and May “was less than forecast [and] the reason for the weakness is the lack of international travel”.
He reported: “There is absolutely no growth in international markets. The one market we see growth is within Europe. The main issue for most countries is borders are closed and Europe is the only international market showing growth.”
Pearce said: “Business is more confident. The challenge is that consumers are not feeling as confident as business.”
He noted: “With the rise in unemployment expected, that is not really a surprise.”
Pearce reported China’s domestic market was down only 28% year on year in July, saying: “Airlines in China are pricing to stimulate demand, less so in other markets.”
Yet he said: “Health concerns remain paramount. In Vietnam, the domestic market had fully recovered by July. But the reappearance of Covid in the last few weeks has seen the market push back down.”
He insisted: “Confidence is the issue, but policy is not helping. Even when borders are not closed, quarantine is proving a barrier to travel.”
Pearce cited the UK as an example, with a plunge in traffic following the UK government decision at the end of July to re-impose quarantine restrictions on Spain.
He said: “This inconsistency of policy is adding to the uncertainty and makes it very difficult for airlines to plan ahead.
“Load factors are at a record low and there is overcapacity because demand is growing so slowly and consumers are booking much later.”
He highlighted the difficulty airlines are having in planning capacity and schedules and warned: “The gap between schedules and bookings is widening which means airlines are burning cash, leaving their finances in a fragile situation.”