Good afternoon and thank you for joining us today. Exactly one year ago today, on 17 March 2020, we held our first COVID-19 press briefing. I certainly did not expect that we would still be doing them in March 2021.
COVID-19 continues to be a global tragedy. And, what has happened in aviation over the past 12 months has been nothing less than catastrophic. Let me take you through a brief recap of the challenges and progress ….
- Demand fell through the floor. The scale of the decline completely dwarfed what happened in 9.11, SARS or the global financial crisis.
- This caused a de-connecting of the world. Before the crisis we had almost 30,000 unique international routes between airports. Now we have about 12,000. And the density of those connections has become much thinner. Before the crisis the average route was served by about 43 flights per month. Now it’s around 20 flights per month—not even daily. The massive loss of connectivity depressed economies worldwide—essentially shutting down international tourism, conventions, exhibitions, and the like along with flying.
- Domestic travel did better. The number of routes being served is basically unchanged. But we went from an average of almost 90 flights per route per month to 66.
- Overall, in terms of passenger demand, we are back to 1998 levels—a 66% fall from pre-crisis levels.
- And in terms of passenger revenue, we ended 2020 at 1993 levels.
- Cargo, of course was a different story. It returned to 2019 levels by January. What is being shipped has changed with the crisis. But people still rely on fast and efficient delivery of goods. And that is certainly true with the critical role that air cargo is playing when delivering vaccines.
- A viable air transport sector will be critical to energize the recovery. Governments realize that and have provided vital cash and other relief measures to preserve the sector during the pandemic—with direct cash infusions and through measures such as tax relief and loan guarantees. In total, it is valued at over US $225 billion.
- The industry has done its homework to prepare for the eventual restart of operations. A recent poll of people who have traveled since June last year shows that 90% believe that the airlines have done a good job in enforcing health safety rules. And 86% reported that they felt safe while on board.
- As we showed last week, about 57% of travelers are ready to fly within a few months of the pandemic being contained.
- And we have very good news today with the first traveler using the IATA Travel Pass arriving in London from Singapore later this afternoon. Efficiently and securely handling health credentials—vaccine and testing certificates—will be essential to an efficient re-start. We believe that the IATA Travel Pass will play a major role in that. And this trial implementation is a major milestone on the way to the app release in April.
In sum, there is light at the end of the very long tunnel. More and more people are being vaccinated. While we believe that vaccines will play an important role in opening borders, they are not a silver bullet. Testing will also play a role. That will ensure that those who cannot be, or prefer not to be vaccinated, will have an opportunity to travel.
So, what will it take to get the industry restarted?
There are a few issues that will need to be addressed…..
The first is replacing quarantine with testing/vaccination requirements
So long as governments maintain quarantine requirements, there will be no restart. With ample testing capacity, testing to travel is the first option. And with more and more people being vaccinated, there is a growing population that should be able to travel without restriction.
One key element is still missing—secure digital standards for testing and vaccination certificates. We moved a step closer to this with the latest ICAO CART recommendations which were announced on Friday. This should encourage governments to accept digital certificates. But we still need the global standards being worked on by WHO and OECD. With millions of vaccines already being distributed and the EU committed to its Green Pass, you could say this already is late in coming.
The second is that governments must stay engaged.
This crisis is not over. Normally, I would say that governments should set the rules and let airlines run the business. Fundamentally that is still true. But we would have seen huge bankruptcies had governments not stepped up with over $225 billion of relief.
I see at least two vital roles that governments must play:
- We will need continued relief measures—particularly those that do not increase the debt burden. Cost reduction will be a critical help. And, eventually, stimulus. We have already seen some plans by governments to subsidize tickets, routes, domestic journeys, etc. As part of the preparations to restart international travel, I urge governments to consider stimulus measures.
- We will also need planning. I have said this many, many times, but it bears repeating. We cannot restart this industry with the flip of a switch. It will require careful planning to take aircraft out of long-term storage, to ensure crew qualifications, to recall laid off employees, to reopen closed terminals and so on. We can only be ready to energize the recovery from day one if governments have a plan and share it with us. The UK is the example to follow. And we are starting to see some similar activities in other key markets…but not enough!
Before taking your questions, I have a couple of things to share.
- First, an announcement. Our Board of Governors took the decision to postpone the IATA AGM until 3-5 October. It will still be in Boston and hosted by JetBlue Airways. We believe it is important to demonstrate the value of meeting in person. And it appeared that our original dates in June could make that difficult. By October, we hope that borders will be sufficiently open to gather.
- This will be my last briefing. At the end of the month I will hand over to my successor Willie Walsh. I am sure that he will continue to make transparent and open media relations a priority for IATA.
- And the last point is to personally thank you for following IATA and this industry. Aviation is important. Economically, it is obvious—this last year has showed us what happens when people cannot fly. Millions of jobs depend on aviation. When we don’t fly, they don’t exist. And we have also seen the personal, emotional and mental stress of being denied the freedom to fly. I appreciate you giving aviation the spotlight that it deserves. Please continue to follow aviation—even after the crisis ends. Aviation is the business of freedom—it provides amazing value to people and long may that inspire great stories for you to cover.
With that, I look forward to your questions.
Listen to media briefing recording
Press release IATA Travel Pass Successfully Trialed on First International Flight
Presentation: COVID-19 has been an unprecedented shock (pdf)