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Travel demand may only return to pre-pandemic levels by 2022 – Etihad CCO

Travel demand may only return to pre-pandemic levels by 2022 – Etihad CCO

Middle East airlines face estimated revenue losses of $24bn this year, according to IATA

As airlines gradually resume operations following lockdowns enforced by governments worldwide to curb the spread of the Covid-19 pandemic, travel demand will take a long time to pick up again, a senior official has said.

“The reality is that the repercussions of Covid-19 will likely be felt in our industry for a very long time,” said Robin Kamark, Etihad Aviation Group’s chief commercial officer.

“At a minimum, travel demand may not return to what it was before this pandemic until the back end of 2021 and most probably, and highly likely into the later part of 2022.”

According to the International Air Transport Association (IATA), Middle East airlines alone face estimated revenue losses of $24bn this year due to the impact of the pandemic. The UAE alone could see 31 million fewer passengers, resulting in a $6.8bn revenue loss.

The global body is also cautious in its recovery forecasts.

As per a baseline scenario, in 2021, it expects global passenger demand to be 24 per cent below 2019 levels and 32 per cent lower than IATA’s October 2019 forecast for the year.

“We don’t expect 2019 levels to be exceeded until 2023,” it said.

In a more pessimistic scenario, if lockdowns extend into Q3 possibly due to a second wave of the virus, passenger demand in 2021 could be 34 per cent lower than 2019 levels and 41 per cent below IATA’s previous forecast for 2021.

“Major stimulus from governments combined with liquidity injections by central banks will boost the economic recovery once the pandemic is under control,” said Alexandre de Juniac, IATA’s director general and CEO.

“But rebuilding passenger confidence will take longer. And even then, individual and corporate travellers are likely to carefully manage travel spend and stay closer to home.”

The UAE halted all scheduled international flights in late March, with only repatriation and cargo services in place. Some of those restrictions are gradually lifting.

Etihad, which has resumed flights to certain destinations, has been operating special passenger, freight and cargo services since travel restrictions began, said Kamark.

“These include passenger and belly-hold freight flights to destinations that we have never flown to before, such as Oslo, shipping consignments including medical equipment and pharmaceuticals not only inbound to the UAE, but also to other countries in need of critical supplies,” he said.

Looking ahead, Kamark anticipates international passenger routes to reopen gradually.

“We foresee a gradual resumption to normal operations, starting off with countries within the Gulf region followed by key international cities across the globe,” he said.

“Aviation will return to growth but the question is when. Previous volumes will pick up but it will take considerable time based on the effects we have seen so far.”

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