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April 2020
Air Passenger Forecasts:2020 Falls, Expected Recovery and Long-RunOpportunities
David Goodger Managing Director, EMEA Tourism Economicsdgoodger@oxfordeconomics.com
Andrew Matters Deputy Chief Economist IATAmattersa@iata.org
Global lockdowns are having a very large impact on economy and travel
60 100
Present
Past
China Italy Spain France GermanyUS (specific states) UKIndiaAustralia Japan Other
Global lockdowns
0 20 40Source : Oxford Economics/Haver Analytics
80% of global GDP
16%
63%
Source: IATA Economics using FlightRadar24 data
Questions: Use the question panel on the right
Immediate economic impact will be greater than during GFC
2
4Non-China EM q/q contribution (RHS)China q/q contribution (RHS)Advanced economies q/q contribution (RHS)Global % quarter (LHS)
0
-2
-4
-6
-82004 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
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 impulsePpts of potential GDP
Forecast
Questions: Use the question panel on the right
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
2019Source: Oxford Economics
2022 GDP relative to pre-recession trend
Global GDP OutlookAnnual growth, %
Questions: Use the question panel on the right
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, Tourism Economics
Global Air Passenger GrowthAnnual 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 LevelsAnnual growth, %
The dramatic fall in the number of flights has occurred across all regions
Source: IATAusingFlightRadar24 data
Questions: Use the question panel on the right
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
Outside the top-30 airlines, debt levels remain high
Source: IATA
Questions: Use the question panel on the right
The usual v-shape recovery didn’t involve a global recession
120110100
908070605040302010
-3 -2 -1 0 1 8 9 10 11 12
Impact of past disease outbreaks on aviationIn
dex
(cris
ism
onth
=100
)
2 3 4 5 6 7Months 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
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 AprilSurveySource: IATA
Questions: Use the question panel on the right
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 baselinePre-coronavirus baseline (Jan 2020)Downside scenario
Source : Oxford Economics/Haver Analytics
Global: comparing the forecast and GFCIndex (quarter prior to recession, t=100)
Questions: Use the question panel on the right
Oct Nov Dec0%
2%
4%
6%
8%
10%
12%
14%
16%
MEAN America
Europe APAC
Latin America
Jan Feb Mar Apr May Jun Jul Aug Sep
Global arrivals: average monthly seasonality%share annual 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 expectedto 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
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 ScenarioAnnual growth, %
2020 2021 2022 2023-60%
-40%
-20%
0%
20%
40%
Source: IATA, Tourism Economics
Global Air Passenger Scenarios Relative to 2019LevelsAnnual 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
Regional profiles are similar with AsPac & AME recovering quickest…
Source: IATA/TourismEconomicsQuestions: Use the question panel on the right
The long-run outlook remains robust…
Source: IATA/TourismEconomicsQuestions: Use the question panel on the right
…with Asia Pacific continuing to lead the way
North America522m2.2%
Latin America365m3.4%
Europe636m2.2%
Middle East 274m4.4%
Africa209m4.4%
Asia Pacific2,725m
5.0%
Source: IATA/TourismEconomicsQuestions: Use the question panel on the right
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