Latest Global airline data; the good the bad and the ugly

Chinese domestic traffic is the star turn and continues to rebound with Covid mostly crushed.

Yesterday the latest full passenger data for July 2020 measured against July 2019 was released and shows a tiny bit of positive news in some regions of the world.

In others the figures were not even mediocre, and too many were as shockingly bad as expected.

Let’s start with the bad.

Global

Overall, globally, July 2020 was 79.8% down on July 2019.

That was though, an improvement over June which was down 86.9% over the same month last year.

However it was nothing like the improvement needed to encourage any belief that the sharp down turn would be matched by a V shape upturn.

The complexity comes in where those improvements came from: Russia and China showed the biggest gains while the European and US markets remained static.

Overall global capacity was down by 70.1% and average global load factors were just 57.9%, well below the break even rate of 75% and the profit zone of 80-85%.

What this means is that just 3 in 10 of every airline seats flying globally in July 2019 was flying in July 2020. It also means that just 1.5 seats out of 10 occupied in July 2019 were occupied in July 2020.

International travel

International passenger levels are still shockingly bad.

July international passenger demand collapsed 91.9% compared to July 2019, a slight improvement over the 96.8% decline recorded in June. Capacity plummeted 85.2%, and load factors sank 38.9% to 46.4%.

What does that mean?

Just 0.89 of a passenger flew international in July 2020 for every 10 that flew international in July 2019.

Only 1.5 seats were flying in July 2020 for every 10 flying in July 2019.

For every 10 seats flying in July 2020 only 4.6 were actually carrying passengers, compared to 8.5 passengers for every 10 seats in July 2019.

Flying come hell or high water, RyanAir isn’t giving up in Europe and wants to be first to pick up when the recovery really begins

Europe including U.K.

The European market recovered but only slightly, with capacity down 79.1% and demand down 87%.

Load factors in Europe were around 55%.

What that means is only 2.9 seats in 10 were flying and only around 1.6 seats in 10 were actually carrying a passenger compared to the same time last year.

AirAsia is struggling through a disastrous aviation market

Asia-Pacific (excludes China)

July traffic collpased 96.5% compared to July 2019, virtually unchanged from a 97.1% drop in June, and by far the steepest contraction among the global regions. Capacity fell 91.7% and load factors shrank 47.3% to 35.3%.

What that means is only 0.83 out of 10 seats in the region were flying, and less than 0.4 in 10 were actually carrying a passenger.

United seems to have grasped the nettle and understood more quickly what the consequences of Covid in the US really mean.

US domestic

US figures had demand down 94.5%, capacity down 86.1% and load factors of 35%.

What that means is that only 0.55 of a passenger out of 10 in July last year, wanted to fly in July 2020.

Out of every 10 seats available last year in the US only 1.39 seats were available this year. Out of those seats available just 3.5 seats out of every 10 flew a passenger.

If you look at that more aggressively you could argue that US airlines needed to cut their seats by half again in July to even start to make ends meet. In effect what they really needed was to shut down three quarters of their entire fleet as a minimum, for at least a year. It’s this realisation that is finally coming home to United and the others, with August improvements still marginal as Covid runs riot and the Trump administration basically does nothing.

Rest of the world

The African, Middle East and South American figures are even worse, only China which recovered from Covid first, and Russia showed any real domestic improvements and those seem to have continued. China is expected to be at 90% of it’s September 2019 domestic figures when they’re reported in November.

Conclusions

July’s figures show that where Covid is highest in developed societies (the US) and poses the most threat and worry, passenger numbers are near rock bottom. Forecasts for August are little better with deterioration in September-October. Airlines are slashing capacity to accommodate the situation after months of artificially high availability propped up by the CARES Act. Airlines may have been paid to fly but passengers didn’t want to know.

In Asia, restrictions on travel, the grounding of major airlines almost entirely, such as Qantas, ANZ, Singapore Airlines and Air Asia have devastated regional flying. Even domestic flying is minimal. Many of those airlines see no international travel at all until this time next year as being viable.

Gone almost globally, the 744 is over. Qantas thinks it’s A380’s will fly again – in 2023.

In Europe, the desire to travel and vacation is high, but remains a nervous consideration for passengers. The UK’s short notice and ruthless quarantine approach – blocking out whole countries with little more than 36 hours notice, worries travellers, causes bottlenecks and places airlines facing refund demands under huge stress. Ironically little or nothing is done to police those who are supposed to be in quarantine for 14 days on return from a listed hot spot. Typically British.

European travel has been very much lower than expected, but it’s been consistent, if highly unprofitable, for scheduled airlines.

The rest of the world, especially South America is in dire straights. Closed borders, airlines at near collapse have killed South America’s aviation market.

In Africa, already poorly served, bankrupt airlines, low availability and economic hardship with Covid rampant in places have squashed demand. It’s been made worse by the dire situation of the Emirates-Etihad-Qatar trio pulling their aircraft from the region for now, with a slow return expected.

Ethiopian may prove to be a regional power house in aviation recovery in Africa.

The Middle East has suffered almost as badly as Asia-Pacific but will likely show the quickest upturn internationally as they transit so many passengers from East to West.

The star performer is China. Domestically their airlines are racing back towards last years volumes. The near eradication of the virus has given people confidence to fly. International is well down, but the authorities only yesterday announced changes to arrivals into Beijing Capital that will ease entry.