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India’s decision to restart flying welcome but will not ‘materially affect’ global numbers: IATA

Our Bureau New Delhi | Updated on July 01, 2020 Published on July 01, 2020

The government’s decision to restart domestic flying is a welcome move, but it will not “materially affect” the global numbers at the moment, Brian Pearce, Chief Economist, International Air Transport Association (IATA), said on Wednesday.

“India is one of those really important markets for the future,” he said in a conference call with global media, adding that it has fewer people flying relative to other countries, including China.

India restarted domestic flying on May 25, and last Friday allowed domestic airlines to operate up to 45 per cent of the flights they had been operating before the lockdown was implemented on March 25. When flying restarted on May 25, the government had allowed airlines to operate only 33 per cent of the flights.

Addressing the media, Pearce said there had been modest improvements in other Asian markets although they were too small to impact the global totals.

“It is an encouraging sign that once the lockdown eases, there is some pent-up demand for air travel. But in flying these passengers, the airlines are finding that the load factors are incredibly low,” he said. (Load factor measures the percentage of available seating that is filled with passengers)

Some improvements have been seen in the US market. “But at the moment, US airlines are flying with load factors of less than 40 per cent which is unlikely to be profitable.”

Pearce added that, on an average, domestic load factors are just under 57 per cent globally, although they are slightly higher in China at 68.8 per cent.

IATA also said that passenger demand in May (measured in revenue passenger kilometres (RPKs)), dropped 91.3 per cent compared with May 2019. This is a mild up-tick from the 94 per cent annual decline recorded in April 2020. The improvement was driven by recovery in some domestic markets, most notably China.

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Published on July 01, 2020
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