‘Airline traffic to stay below pre-pandemic level’

MANILA, Philippines — Fitch Ratings expects passenger traffic of airlines in key Asia Pacific markets, including the Philippines, to remain well below 2019 levels by next year.

Fitch Ratings said it expects the Philippines, where further COVID-19 spread remains a risk, to see average RPK (revenue passenger kilometers) levels at 35 percent of the baseline in 2020 and 60 percent in 2021.

Passenger traffic at Vietnamese airlines is expected to rebound faster than in other Southeast Asian markets due to Vietnam’s low incidence of COVID-19 cases.

Airlines in Indonesia, Thailand and Malaysia are likely to report similar levels like the Philippines due to weak international traffic volume despite their success in controlling the pandemic.

Fitch Ratings said its forecasts are based on the assumption that a vaccine or treatment will not become available at scale in 2021, but that progress is made in controlling the pandemic.

“Airline passenger volume could improve faster than we forecast if an effective vaccine is distributed sooner than we believe or if there is more success in containing the pandemic. However, we foresee flat demand in 2021 that is well below the 2019 base should there be limited progress on this measure,” it said.

“The pace of the recovery will hinge on each market’s relative success in bringing the coronavirus pandemic under control, helping to improve passenger confidence and reduce the risk of further travel restrictions, as well as its share of international traffic, which we expect to stay weaker than domestic volume,” Fitch Ratings said.

The International Air Transport Association (IATA) earlier said global passenger traffic, measured in RPKs, would not return to pre-pandemic levels until 2024, a year later than previously projected.

It said recovery to pre-COVID-19 levels of passenger numbers, which will recover faster than traffic, would also slide by a year from 2022 to 2023.

IATA has called on governments to open borders as travel restrictions and quarantines continue to pummel travel demand.

It said governments should work together to immediately find ways to re-establish global connectivity by re-opening borders, as well as continue with relief measures, to sustain airlines during the COVID-19 crisis.