TravTalk India Online Magazine
The year may see an interesting turn of events for the aviation industry as the vaccine rolls out, feels Peter Harbison, Chairman Emeritus, CAPA. But, to truly get back to being a profitable sector, air travel may still take another year.
Manas Dwivedi
This is a remarkable time for us because we can now talk about having a vaccine for this dreadful event that has been plaguing us for the last nine months,” says Peter Harbison, speaking at the CAPA Live event recently. “Of course, it’s not going to be plain sailing. We could be looking at a big second or third, or even extended first waves occurring in Europe and America. How long can airlines hold their breath in terms of cash burn?” he questions.
Speaking about how different markets have fared, he adds, “Several Asian markets have performed very well. According to the OACD, the recession that we’re going to be looking at will be the worst since the Depression nearly a 100 years ago. It’s going to be hard for airlines to get back, to get the premium traffic flying, to get large numbers of what has become a very price-sensitive market, particularly in Asia.”
Harbison adds that global passenger traffic (RPKs) will not return to pre-COVID-19 levels until 2025 or beyond. “In fact, we are seeing 2010 levels still persisting right through 2024. So much depends on what happens internationally. IATA is forecasting another 12 months of cash burn,” he says.
As a result, we can’t rely on the vaccine as the saviour for the industry, believes Harbison, pointing out that “Government support or progress on the use of testing to accelerate market opening will be critical for the survival of airlines in many regions over the next six to nine months.” Speaking about travel bubbles of which there has been much talk over the past few months, he said that even in Europe where one would expect the EU to have a more multilateral approach, things are still so fragmented. “It’s going to be bilateral bubbles that start to open things up. But, it’s not easy to open up bubbles and I think Asia Pacific is leading the way in terms of expectations,” he shares.
