Economic Impact of COVID-19 on Civil Aviation
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Economic Impact of COVID-19 on Civil Aviation Sainarayan A. Chief, Aviation Data and Analysis, ICAO Sijia Chen Air Transport Officer, Economic Development, ICAO Contents Economic impact of COVID-19 on civil aviation Forward looking scenario analysis ICAO COVID-19 interactive dashboards Financial relief and mitigation measures Value-added of aviation to national economy 2 Economic Impact of COVID-19 on Civil Aviation - Global - Figures and estimates herein are subject to substantial changes, and will be updated with the situation evolving and more information available. 3 Drastic capacity cut along with dramatic drop in demand Both capacity and demand reached the bottom low in April; Number of passengers from Jan to Aug dropped by 60% from 3.1 billion in 2019 to 1.2 billion in 2020 Source: ICAO ADS-B and OAG, plus estimates 4 Regional difference in resilience and speed of recovery Comparison of total seat capacity by region (7-day average, YoY compared to 2019) 40% Africa 20% Asia/Pacific Europe 0% Latin America/Caribbean -20% Middle East North America -40% -60% -80% -100% Jul-03 Jul-11 Jul-19 Jul-27 Jan-01 Jan-09 Jan-17 Jan-25 Jun-01 Jun-09 Jun-17 Jun-25 Apr-06 Apr-14 Apr-22 Apr-30 Feb-02 Feb-10 Feb-18 Feb-26 Sep-05 Sep-13 Aug-04 Aug-12 Aug-20 Aug-28 Mar-05 Mar-13 Mar-21 Mar-29 May-08 May-16 May-24 Source: ICAO ADS-B 5 Airline passenger revenue of all regions plummeted Airlines are estimated to loss approximately USD 241 billion passenger revenue from Jan to Aug 2020 compared to 2019 Source: ICAO estimates 6 Airport and ANSP revenues were also severely impacted Airports and ANSPs are estimated to loss approximately USD 68 and USD 9 billion from Jan to Aug 2020 compared to 2019 Source: ICAO estimates 7 Economic Impact of COVID-19 on Civil Aviation - North America and Latin America/Caribbean - Figures and estimates herein are subject to substantial changes, and will be updated with the situation evolving and more information available. 8 Steep fall in traffic followed by stagnant recovery North America Latin America/Caribbean Number of passengers from Jan to Aug Number of passengers from Jan to Aug dropped by 57% from 689 million in 2019 dropped by 59% from 235 million in 2019 to 295 million in 2020; international to 97 million in 2020; international passengers declined by 68% passengers declined by 63% Source: ICAO ADS-B and estimates 9 Source -100% -80% -60% -40% -20% 20% 0% : Jan-01 ICAO ADS Jan-09 Jan-17 Jan-25 Feb-02 America/Caribbean while Latin market by domestic supported was North America - B operationB Feb-10 (7 Feb-18 International seat capacity reduction - Feb-26 2019) comparedto YoY average, day Mar-05 Mar-13 data Mar-21 Mar-29 Apr-06 Apr-14 Apr-22 Apr-30 May-08 May-16 recovery domestic in pace slowest the showed May-24 Jun-01 Jun-09 Jun-17 Jun-25 Jul-03 Jul-11 North America North Middle East America/Caribbean Latin Europe Asia/Pacific Africa Jul-19 Jul-27 Aug-04 Aug-12 Domestic passenger traffic often exhibits more more exhibits often traffic passenger Domestic Aug-20 Aug-28 Sep-05 Sep-13 -100% -80% -60% -40% -20% 20% 40% 60% 0% Jan-01 Jan-09 Jan-17 Jan-25 Feb-02 Feb-10 Feb-18 (7 Feb-26 - day Mar-05 reduction capacity seat Domestic resilience than international than resilience Mar-13 Mar-21 average, Mar-29 Apr-06 Apr-14 Apr-22 YoY Apr-30 May-08 compared 2019) to May-16 May-24 Jun-01 Jun-09 Jun-17 Jun-25 Jul-03 Jul-11 America North Middle East America/Caribbean Latin Europe Asia/Pacific Africa Jul-19 Jul-27 Aug-04 Aug-12 Aug-20 Aug-28 Sep-05 10 Sep-13 Share of international and domestic traffic of the region North America Latin America/Caribbean Majority of traffic was dominated by domestic Since April, international passengers passengers, and international passengers represented less than 20% while increased to represented less than 10% since April 27% in August Source: ICAO ADS-B and estimates 11 Steep fall in international passenger load factor (North America) Both domestic and international load factor were below world average; in April, domestic load factor dropped to all-time low at 15% and below 30% for international Domestic load factor 2020 vs. 2019 International load factor 2020 vs. 2019 Source: ICAO ADS-B 12 Steep fall in international passenger load factor (Latin America/Caribbean) Domestic load factor performed better than world average; international load factor dropped more significantly similar to world average Domestic load factor 2020 vs. 2019 International load factor 2020 vs. 2019 Source: ICAO ADS-B 13 Share of traffic by region Number of passengers of Jan-Aug Share of passengers by region 2020 compared to 2019 of Jan-Aug 2020 Source: ICAO ADS-B and estimates 14 Impact by international route groups Impact on North America Impact on Latin America/Caribbean international route groups international route groups (passenger loss Jan-Aug) (passenger loss Jan-Aug) Source: ICAO ADS-B and estimates 15 Passenger revenue loss by month North America North America recorded a total airline Latin America/Caribbean recorded a total passenger revenue loss of around USD 57 airline passenger revenue loss of around USD billion from Jan to Aug; 65% of loss was 17 billion from Jan to Aug; 60% of loss was attributed to domestic attributed to international Source: ICAO ADS-B and estimates 16 Forward Looking Scenario Analysis Figures and estimates herein are subject to substantial changes, and will be updated with the situation evolving and more information available. 17 What “recession shape” can be assumed given uncertainties surrounding the outlook? World’s GDP Projections (by IMF) • How long will the pandemic last and what will be the severity levels? • How deep and how long will the global recession be? • How long will lockdowns and travel restrictions continue? • How fast will consumer confidence in air travel be restored? • Will there be a structural shift in industry and consumers’ behaviors? • How long can the air transport industry withstand the financial adversity? https://www.imf.org/en/Publications/WEO/Issues/2020/06/24/WEOUpdateJune2020 Source: IMF Word Economic Outlook (April 2020) 18 Domestic passenger traffic is recovering ahead of international Domestic passenger traffic in China already bottomed out in mid-February, and capacity offered in August was recovered to around 90% of last year Source: ICAO ADS-B operation data 19 Estimation of trend of world passengers for 2020 Scenario estimations of world total passengers of 2020 (-57% to -60%) 500.00 447.35 450.00 442.87 416.70 430.52 429.26 398.67 399.02 400.04 400.00 382.81 385.63 401.00 385.59 389.60 374.47 390.45 Dec 2020 385.53 384.93 364.17 362.92 356.99 369.49 358.31 348.20 369.49 373.41 372.18 vs. 2019 350.00 351.09 354.53 351.09 327.76 327.76 309.96 300.00 290.33 281.90 -40% 266.96 274.01 278.49 “Nike swoosh”-shaped path 250.00 260.61 233.71 241.16 -52% 224.66 221.22 238.91 209.57 200.00 188.41 198.85 176.81 179.80 -60% Passenger Number (million) 171.29 184.20 177.46 158.16 160.44 158.76 174.72 168.31 156.07 2019 145.12 158.71 150.00 154.35 158.54 152.19 146.69 149.10 Baseline 138.72 152.29 -57% 138.71 132.97 Actual 122.93 136.81 100.00 Scenario 1 U-shaped path Scenario 1a 76.95 W-shaped path Scenario 2 50.00 Scenario 2a 48.76 L-shaped path Reference 31.28 0.00 Jan 2020 Feb 2020 Mar 2020 Apr 2020 May 2020 Jun 2020 Jul 2020 Aug 2020 Sep 2020 Oct 2020 Nov 2020 Dec 2020 Jan 2021 Feb 2021 Mar 2021 Source: ICAO Air Transport Reporting Form A and A-S plus ICAO estimates. 20 Scenario estimates of global industry revenue loss for the year of 2020 ICAO Economic Impact Analysis of COVID-19: https://www.icao.int/sustainability/Pages/Economic-Impacts-of-COVID-19.aspx -57% to -60% decline in world total passengers in 2020 vs. 2019 Airline passenger Airport revenue loss ANSP revenue loss revenue loss • ~ USD 351 to • ~ USD 90 to • ~ USD 10 to 12 373 billion 110 billion billion Source: ICAO estimates and subject to change 21 Scenario estimation of trend of passengers for 2020 North America (Total) Latin America/Caribbean (Total) 0 0 Actual Dec 2020 -10 Dec 2020 Scenario 1 vs. 2019 vs. 2019 -5 Scenario 1a -20 Scenario 2 -44% Scenario 2a -10 -30 Reference -49% -56% -40 -58% -15 Millions Millions -50 -66% -68% -20 -60 Actual -61% Scenario 1 -67% -70 Scenario 1a -25 Scenario 2 -80 Scenario 2a Reference -30 -90 Jul 2020 Jul Jan 2020 Jan 2021 Jan Jun 2020 Oct 2020 Oct Apr 2020 Apr Feb 2020 Feb 2020 Sep 2021 Feb Dec 2020 Dec Aug 2020 Aug Nov 2020 Nov Mar 2020 Mar 2021 Mar May 2020 Jul 2020 Jul Jan 2021 Jan Jan 2020 Jan Jun 2020 Oct 2020 Oct Apr 2020 Apr Feb 2020 Feb 2020 Sep 2021 Feb Dec 2020 Dec Aug 2020 Aug Nov 2020 Nov Mar 2020 Mar 2021 Mar May 2020 Source: ICAO estimates based on ICAO ADS-B, OAG, ICAO LTF, ICAO Statistical Reporting, IATA Economics, and IMF/World Bank Economic Outlook 22 Scenario estimates of industry revenue loss for the year of 2020 ICAO Economic Impact Analysis of COVID-19: https://www.icao.int/sustainability/Pages/Economic-Impacts-of-COVID-19.aspx North America Airline Airport ANSP -57% to -61% • ~ USD 85 to 91 • ~ USD 19 to 21 • ~ USD 0.9 billion billion billion Latin America/Caribbean Airline Airport ANSP -59% to -63% • ~ USD 26 to 28 • ~ USD 6 to 7 • ~ USD 0.7 billion billion billion Source: ICAO estimates and subject to change 23 Post-COVID-19 traffic forecast (North America) International Passenger Traffic International Passenger Traffic (World, RPK) (North America, RPK) 6,600 CAGR 4.1% 1,800 6,400 1,750 CAGR 3.0% 6,200 1,700 6,000 CAGR 1.3% CAGR 0.4% 1,650 5,800 1,600 5,600 1,550 5,400 1,500 REVENUE PASSENGER KILOMETRES (BILLIONS)