Middle East airlines seeing biggest hit to demand, 'humble' 2021 recovery: IATA

Dubai — Middle Eastern airlines will see passenger demand plunge 73% this year, the largest collapse among all regions, due to pandemic-related related travel restrictions, an official from the International Air Transport Association said Nov. 25.

The region's airlines are set to lose $7.1 billion in 2020 and their capacity is projected to plummet by 64.5% in 2020 compared with a year earlier, Muhammad Ali Albakri, IATA's regional vice president for Africa and the Middle East, said in a media briefing. Middle East airlines are losing $68.50/passenger, he said.

Recovery in 2021 will be "humble" because the region has a number of hubs that rely on long-haul flights that have been slow to recover, Albakri said.

Middle Eastern airlines' losses will shrink to $3.3 billion in 2021, when demand is forecast to increase 43% compared with 2020 but still be 61% lower than 2019.

Full recovery to pre-pandemic levels is unlikely before 2024, according to IATA.

"The recovery [in 2021] will be based on domestic traffic and regional traffic and some of the travel bubbles that countries have managed to get -- bilateral agreements between Middle Eastern countries and other international countries," Albakri said.

Cargo will also contribute to the regional recovery in 2021, he said.

Globally, the airline industry is forecast to post a net loss of $118.5 billion in 2020, deeper than the $84.3 billion projected in June, with demand falling 66.3% from year-ago levels, according to the IATA.

S&P Global Platts Analytics estimates the Middle East consumed 602,000 b/d of jet fuel in 2019, of which the UAE accounted for 180,000 b/d.

The Middle East has three major hubs in Dubai and Abu Dhabi in the UAE and Doha in Qatar. Doha-based Qatar Airways, Dubai-based Emirates, Abu Dhabi-based Etihad Airways have big fleets of jet-fuel guzzling wide-body aircraft usually flown on long-haul flights.

Emirates, which operates out of Dubai International Airport, has the world's biggest fleet of Airbus A380s and Boeing 777s, a majority of which had to be grounded this year because of the lack of long-haul flights.

Emirate saw its passenger traffic plunge 95% in its first half of its fiscal year starting April. The airline, which posted a first-half loss for the first time in over 30 years, carried 1.5 million passengers between April 1 and Sept. 30.