New coronavirus variants could jeopardize the recovery of the air travel industry, a report from Bloomberg says.
The International Air Transport Association (IATA), the airline industry’s trade body, says passenger traffic could only end up improving by around 13 percent in a worst-case scenario.
The official forecast in December was a 50 percent uptick.
The IATA says that if the 13 percent figure holds true, the overall number this year would be 38 percent of what the air travel numbers were pre-pandemic, Bloomberg writes. IATA Director General Alexandre de Juniac said there would be a need for as much as $80 billion in government funding in that case, to help the industry survive.
There’s a strong pent-up demand for travel, according to IATA Chief Economist Brian Pearce, but that could be hampered by the travel restrictions cropping up in response to new COVID variants.
“There’s a recovery, but it’s a much smaller recovery,” Pearce said. “What we’ve seen in recent weeks is governments taking a much, much tougher, more cautious approach.”
He said herd immunity could be required before the restrictions are eased, and the new strains might complicate that.
Last year, as the pandemic hit, it decimated the air travel industry and took away about two thirds of its passengers. The steepest drops came in April, but new December lockdowns saw figures 70 percent lower. That came to 85 percent on international routes. Bloomberg also reports that the cargo demand did much better overall, only declining 11 percent.
PYMNTS reported that the airline industry is looking closely at the rollout of the vaccine to determine how the near future will go. In addition, they’re expecting to see many older jets retired in favor of new, sleeker models. Nine in ten of the largest jets are grounded right now, and only a small percentage of the Airbus A380s are being used with the weak demand and high costs.