The International Air Transport Association (IATA) downgraded its traffic forecast for 2020 to reflect a weaker-than-expected recovery, as evidenced by a dismal end to the summer travel season in the Northern Hemisphere. IATA now expects full-year 2020 traffic to be down 66% compared to 2019. The previous estimate was for a 63% decline.
 
August passenger demand continued to be hugely depressed against normal levels, with revenue passenger kilometers (RPKs) down 75.3% compared to August 2019. This was only slightly improved compared to the 79.5% annual contraction in July. Domestic markets continued to outperform international markets in terms of recovery, although most remained substantially down on a year ago. August capacity (available seat kilometers or ASKs) was down 63.8% compared to a year ago, and load factor plunged 27.2 points to an all-time low for August of 58.5%.

Based on flight data, the recovery in air passenger services was brought to a halt in mid-August by a return of government restrictions in the face of new COVID-19 outbreaks in a number of key markets. Forward bookings for air travel in the fourth quarter show that the recovery since the April low point will continue to falter. Whereas the decline in year-on-year growth of global RPKs was expected to have moderated to -55% by December, a much slower improvement is now expected with the month of December forecast to be down 68% on a year ago. 

“August’s disastrous traffic performance puts a cap on the industry’s worst-ever summer season. International demand recovery is virtually non-existent and domestic markets in Australia and Japan actually regressed in the face of new outbreaks and travel restrictions. A few months ago, we thought that a full-year fall in demand of -63% compared to 2019 was as bad as it could get. With the dismal peak summer travel period behind us, we have revised our expectations downward to -66%,” said Alexandre de Juniac, IATA’s Director General and CEO. 

International Passenger Markets

August international passenger demand plummeted 88.3% compared to August 2019, mildly improved over the 91.8% decline recorded in July. Capacity sagged 79.5%, and load factor fell 37.0 percentage points to 48.7%.
 

• Asia-Pacific airlines’ August traffic sank 95.9% compared to the year-ago period, barely budged from a 96.2% drop in July, and the steepest contraction among regions. Capacity dived 90.4% and load factor shrank 48.0 percentage points to 34.8%.
   
• European carriers’ August demand plunged 79.9% compared to last year, improved from an 87.0% drop in July, as travel restrictions were lifted in the Schengen Area. However, more recent flight data suggests this trend has reversed amid a return to lockdown and quarantine in some markets. Capacity fell 68.7% and load factor dropped by 32.1 percentage points to 57.1%, which was the highest among regions.
   
• Middle Eastern airlines had a 92.3% fall in demand for August, compared with a 93.3% decline in July. Capacity collapsed 81.9%, and load factor sank 47.1 percentage points to 35.3%. 
   
• North American carriers’ traffic tumbled 92.4% in August, little changed compared to 94.4% decline in July. Capacity fell 82.6%, and load factor plunged 49.9 percentage points to 38.5%.
   
• Latin American airlines had a 93.4% demand drop in August compared to the same month last year, versus a 94.9% drop in July. Capacity crumbled 90.1% and load factor dropped 27.8 percentage points to 56.1%, second highest among the regions. 
   
• African airlines’ traffic sank 90.1% in August, slightly improved over a 94.6% decline in July. Capacity contracted 78.4%, and load factor fell 41.0 percentage points to 34.6%, which was the lowest among regions.

Domestic Passenger Markets

Domestic traffic fell 50.9% in August. This was a mild improvement compared to a 56.9% decline in July. Domestic capacity fell 34.5% and load factor dropped 21.5 percentage points to 64.2%. 

August Regional Performance

• Asia-Pacific airlines saw demand for international air cargo fall 18.3% in August 2020 compared to the same period a year earlier. After a robust initial recovery in May, month-on-month growth in seasonally-adjusted demand declined for the second consecutive month. International capacity is particularly constrained in the region, down 35%. 
• North American carriers reported that demand fell 4% compared to the previous year—the third consecutive month with a single-digit decline. This steady performance is due in part to strong domestic and transpacific demand on the Asia-North America route, reflecting e-commerce demand for products manufactured in Asia. International capacity decreased 28.2%.
• European carriers reported a decrease in demand of 19.3% compared to the previous year. Improvements have been slight but consistent since April’s performance of -33%. Demand on most key trade lanes to / from the region remained weak. The large Europe–Asia market was down 18.6% year-on-year in August. International capacity decreased 33.5%. 
• Middle Eastern carriers reported a decline of 6.8% in year-on-year international cargo volumes in August, a significant improvement from the 15.1% fall in July. Regional airlines have aggressively added capacity in the last few months with international capacity improving from a 42% fall at the trough in April, to a decline of 24.2% in August, the most resilient of all regions. Demand on trade routes to and from Asia and North America remained strong with demand down 3.3% and up 2.3% respectively year-on-year.
• Latin American carriers reported demand steady at -26.1% compared to the previous year, ending three consecutive months of deteriorating demand. Demand on trade routes between Latin America (particularly Central America) and North America have compensated for weakness on other routes. Capacity remains significantly constrained in the region with international capacity decreasing 38.5% in August, the largest fall of any region. 
• African airlines saw demand increase by 1% in August. This was the fourth consecutive month in which the region posted the strongest increase in international demand and only instance of year-on-year growth among all regions in international volumes. Investment flows along the Africa-Asia route continue to drive the regional outcomes.

“Air cargo demand improved by 1.8 percentage points in August compared to July. That’s still down 12.6% on previous year levels and well below the 5.1% improvement in the manufacturing PMI. Improvement is being stalled by capacity constraints as large parts of the passenger fleet, which normally carries 50% of all cargo, remain grounded. The peak season for air cargo will start in the coming weeks, but with severe capacity constraints shippers may look to alternatives such as ocean and rail to keep the global economy moving,” said Alexandre de Juniac, IATA's Director General and CEO.