Worst is not over for airlines industry as demand plunged in January

 Airlines witness sharp drop of 82.3% in demand in January 2021

According to the latest figures from the International Air Travel Association (IATA), the Middle Eastern airlines saw demand plunge 82.3 percent in January compared to the same month in 2019. Latest figures released by IATA have revealed that capacity year-on-year drop 67.6% and load factor declined by 33.9%.

The numbers were broadly unchanged from an 82.6 percent demand drop in December year-on-year. It was by far the worst drop in all areas covered by the IATA, with Europe second after falling 77.4 %in January.

Total demand for the month, which is measured in revenue passenger kilometers or RPKs, was down 72 percent compared to January 2019.

Alexandre de Juniac, IATA’s director general and CEO, said: “2021 is starting off worse than 2020 ended and that is saying a lot. Even as vaccination programs gather pace, new Covid-19 variants are leading governments to increase travel restrictions.

“The uncertainty around how long these restrictions will last also has an impact on future travel. Forward bookings in February this year for the Northern Hemisphere summer travel season were 78 percent below levels in February 2019.”

According to Eddy Pieniazek, head of analytics and advisory at aviation finance consultants Ishka, the immediate outlook remains bleak for the global aviation industry. “Nothing is going to change in the first half of the year,” he said. “The vaccine rollout is simply getting people fit to travel in the latter half of 2021.” Pieniazek noted that open travel corridors have delivered little or no traffic in 2021 for many airlines.

The mingling of people in airports makes it difficult to secure travel corridors,” he said, adding that Middle East airlines secure up to 80 percent of their traffic through connecting passengers.

“Creating bubbles and corridors becomes near impossible for [Gulf airlines],” he added.

A total of 17.9 million people passed through Dubai International Airport last year, according to the General Directorate of Residency and Foreigners Affairs in the emirate – down 32.5 million from 50.4 million in 2019.

                                                                     Rukhsana Manzoor Deputy Editor