COVID-19

Updated Impact
Assessment

Brian Pearce
Chief Economist
14th April 2020
1
Economics
 Three weeks ago we estimated this COVID-19 impact
Based on a 65% fall in worldwide flights in March, economic recession
forecasts at the time, and a relaxation of travel restrictions through H2

RPKs Passenger revenue

Region of airline registration
2020 % yoy $ billion 2020 vs. 2019 levels
Asia-Pacific -37% -88
North America -27% -50

Europe -46% -76

Middle East -39% -19
Africa -32% -4
Latin America -41% -15
Industry -38% -252

Source: IATA Economics https://www.iata.org/en/iata-repository/publications/economic-reports/third-impact-assessment/ Economics

 Worldwide flights now down almost 80% by early April
Industry virtually grounded outside US and Asia domestic markets
Daily flights, indexed 1st January = 100
140
Number of flights, index to equal 100 1st Jan

120

100

80

60

40 North America
Asia Pacific
20 Global
Europe
0 Latin America
Middle East
Africa

Source: IATA Economics analysis based on data provided under license by FlightRadar 24. All rights reserved. Economics
 Recession now expected to be much deeper in 2020
Economists’ revised forecasts expect output loss twice as large as GFC
10
Global GDP growth
8

6
% change year-on-year

0
COVID-19
-2 March Forecast
Global
-4 Financial COVID-19
Crisis April Forecast
-6
2008 2010 2012 2014 2016 2018 2020 2022

Source: IATA Economics using data and forecasts from Oxford Economics Economics
 Post lock-down return to air travel likely to be in stages
We assume domestic markets open in Q3 but international slower to open
Share of global air travel in 2019
RPKs Passengers

Domestic, 33% International, 42%

Domestic, 58%

International, 67%

Source: IATA Economics using data from IATA Statistics Economics

 Recession alone would push global RPKs down 8% in Q3
This excludes the travel restrictions and confidence effects of COVID-19
Global GDP and RPK growth
10%

8%
Global RPK growth
6%
Global GDP growth
% change year-on-year

4%

2%

0%

-2%

-4%

-6%
Impact on RPK growth profile of
-8% economic recession only

-10% Q3
2016 2017 2018 2019 2020

Source: IATA Economics using data and forecasts from Oxford Economics and IATA Economics
 2020 H2 ‘restart’ slow leaving RPKs down 33% yoy by Q4
Domestic markets assumed to open in Q3, international much slower
Global RPK quarterly profile, % change year-on-year
20%
10%
0%
Impact of the recession
-10%
% change year-on-year

-20%
Q4 50% recovery
-30% Global RPK growth international markets,
-40% reduced by recession

-50%
-60%
-70% Q3 recovery domestic
markets, reduced by
-80% recession impact
-90%
2016 2017 2018 2019 2020 2021
Source: IATA Economics using data and forecasts from Oxford Economics and IATA Economics
 That implies a halving of global RPKs in 2020
With lower yields that means a $314 billion or 55% fall in passenger
revenues
RPKs
Passenger revenue
Region of airline registration 2020 (vs 2019 year-
$ billion 2020 vs. 2019 levels
on-year change)

Asia-Pacific -50% -113

North America -36% -64

Europe -55% -89

Middle East -51% -24
Africa -51% -6
Latin America -49% -18
Industry -48% -314

Note: This assumes, as in the previous impact assessment, that the domestic lock-down lasts 3 months, until the end of Q2. But
international travel restrictions are assumed in this assessment to be reduced more slowly, with only 50% of pent-up
international RPKs recovered by Q4 (after reduction due to recession impact).
Source: IATA Economics Economics
Contacts
economics@iata.org
www.iata.org/economics

Economics