This week's @IATA #COVID19 briefing will focus on the 3-5 year outlook for the industry, delivered by Chief Economist Brian Pearce. #AvGeek #PaxEx

"The air travel market is likely to be slower to recover," says Pearce.

Highlights border closures and other factors will limit recover, even as governments are propping up other facets of the economy.

"Central banks have been pouring cash, not just into the banking system but into corporations as well." -Pearce

But all that cash injected hasn't solved the business confidence problems in the West.

We are yet to see a stabilization of COVID19, particularly in developing markets. Critically we need to see a reduction in the risk of countries importing the disease. -Pearce

That PMI survey above showed a V-shaped recovery in China but travel is nowhere close to as quick a bounce-back. Pearce expects a sharp fall in the average distance from home for each trip.

Shorter trips mean much slower rebound for RPKs relative to pax count.
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Skews some of the "apples-to-apples" comparisons, adversely affects long-haul focused airlines.

"Even in domestic markets we don't expect to see 2019 levels until 2022. In international markets...we wouldn't expect to see 2019 levels of RPKs until 2023 or 2024." - Pearce

First time I think IATA has said 2024 is now in the recovery timeframe.

In the very long-term view there will be a recovery and developing nations will help drive it.

. @IATA now estimating 24% drop in RPKs for 2021 compared to 2019, 32% below the prior IATA prediction. And if there's any additional delays or setbacks in markets opening 2021 could be 41% down.

Ouch. #PaxEx #AvGeek

Now Alexandre de Juniac addressing the media.

"We are eager to fly and we are making proposals to governments to be able to do it safely."

AdJ notes that @IATA is opposed to arrivals quarantines for international travel. It "cannot restart under such conditions."

IATA survey has 84% responding that quarantine is a top concern. #PaxEx

AdJ wants a "Risk-based, layered approach to bio-security that must be coordinated globally. The arriving country must be confident that the testing at the origin location is sufficient. "

#PaxEx

. @IATA is softening a bit on its anti-voucher plans, now asking for "refundable vouchers" that would still let airlines hold the cash.

AdJ's claim that EU261 was not designed for this volume of cxls is questionable IMO.
#PaxEx

"One would hope that [the North Atlantic] markets would be open in the near future, but it really depends on getting governments to agree on those protocols." Pearce not willing to go out on a limb for timing on this recovery. #PaxEx

Re asymptomatic carriers: only possibility for that is to have testing for all passengers. That is not available at the scale we need or fast enough for getting results. Serological tests rather than PCRs are not reliable enough. So testing is not something IATA is asking for...

In 4-6 months, when the industry is able to provide us with fast results and reliable at the correct level that is a recommendation we will put forward. -AdJ
#PaxEx

Lacking tests, AdJ says "Health declarations, temperature control at departure and wearing masks on board...is minimizing to very, very low levels the risk of contamination [transmission] on board" and reimporting the virus. #PaxEx

AdJ says IATA has contacted 21 states to help coordinate a common global standard for screenings by June. Would be a major step forward to reducing border closings and open markets. #PaxEx

We don't see so many barriers [to adopting screening solutions]. What we see is a vacuum because everyone is looking for a solution. ...
We are looking for something that is robust, that is safe and that can be implemented in the very near term. - AdJ

Pearce suggesting that multinational orgs like World Bank may need to get involved to support the travel and tourism industry because African national banks won't have the same level of resources as those in some more developed regions. #COVID19 #AvGeek

Could travel bubbles work? "It is a short-term solution for sure." But AdJ also believes it is not the best solution for the industry. #PaxEx

Will the 9bn euro outstanding in Europe for refunds drive consolidation? Pearce says, "In the absence of additional government support this points to the likelihood of additional failures or consolidation in other ways." #PaxEx

Will the EU adopt common health standards for travelers/screening? AdJ believes it will, with many of those tasks already delegated. At least within the Schengen area and hopefully with the UK as well.
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But these countries all closed based on different rules. Will that change?

Volumes have fallen further for cargo in April, maybe 30% or so on a number of major trade legs. But relative to capacity it is still a pretty strong market. Medical/PPE is main driver. The additional #CovidCombi capacity is helping to backfill/stabilize that.

Does @IATA expect new seating concepts to take flight?
AdJ:
If there is no vaccine in the short-term the question is whether this equipment is necessary or not, if it creates more concerns or safety risks than it solves?
...

In our studies, the fact that nobody is facing each other is a plus in terms of reduced transmission risk.

Dividers could create problems for evac; "it needs a pretty extensive certification process." -AdJ

#PaxEx

. @IATA's Pearce says there's a huge amount of pent up demand that has been stopped only because of the border closures, not because of weakened financial positions of pax. At least for shorthaul, European operations.
#PaxEx

Does @IATA have a position re tying vouchers rather than refunds to other restrictions on companies such as exec compensation or dividends? AdJ says no.

IATA wants common standards to help reopen borders and resume traffic, but in some of the tighter markets that remains further delayed. US-Canada now closed through June 2020. https://twitter.com/MarvinRotrand/status/1260554101940723712

That's the end of this week's @IATA call.

In summary, air travel is screwed for the next 3-5 years and recovery is going to be a slog. Godspeed.

#PaxEx