Air passenger traffic in 2020 plunges 66% on year: IATA

Passenger air traffic plummeted 66% year on year in 2020 and the near-term outlook is one of continuing stagnation, the International Air Transport Association said Feb. 3.

December figures confirm stagnation, showing a decrease of 69.7% on year, which was broadly in line with October and November's trends, IATA said. Recovery has been hit by a sharp spike in COVID-19 cases and new travel restrictions, the association added.

"Forward bookings have been falling sharply since late December, which points to a challenging start for 2021," IATA said.

Global air traffic is declining and this is being led by a noticeable drop in Chinese domestic flights, with particular weakness still in Europe, the UK and Japan, S&P Global Platts Analytics said Feb. 3.

"Chinese travel over the Lunar New Year is expected to be notably restrained, but a decline that began to take root after the Golden Week holidays back in October has accelerated in January. India and Brazil aviation continue to improve," Platts Analytics said.

This comes amid wider macroeconomic improvement. Worldwide, daily new coronavirus cases have fallen 38% from peak rates of 790,000/day on Jan. 11 to 492,000/day most recently, Platts Analytics said. Meanwhile, vaccine deployment is accelerating with over 105 million doses administered globally, the analysts added.

Air cargo volumes fared considerably better than passenger traffic. Industry-wide cargo tonne-kilometres (CTKs) fell 10.6% on the year in 2020, IATA said. This was a greater drop than in wider world goods trade, which declined 6% in 2020, IATA said.

European jet fuel remains in a relatively steep contango over the next year as traders see prompt prices lower, while demand continues to suffer from lockdown measures.

The prompt market structure has seen small blips of backwardation as low supply tightens the physical market but for now is in a shallow contango.

The front-month jet fuel swap was assessed at $470.25/mt on Feb. 2, while the second-month was assessed at $489.50/mt and the month-twelve swap -- now Feb 2022 -- was assessed at $501.75/mt.