Cheap flights for the next two years on long-haul routes likely amid low demand for tickets, as domestic trips in Asia lead aviation’s weak recovery

Facing losses of US$100 billion over two years, airlines will do everything to raise demand for long-haul travel. But trade body IATA says some won’t survive

Demand for domestic flights in China, Vietnam and South Korea is nearly back to normal, but more passengers book at the last minute, hitting airlines’ cash flow

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An empty airport check-in area. Airlines are in crisis, and the latest figures from travel association IATA paint a grim picture for the near future. For passengers, long-haul ticket prices should remain low. Photo: Shutterstock

Published: 5:30pm, 29 Jun 2020Updated: 1:26pm, 2 Jul 2020

With airlines seeing close to zero demand for long-haul flights, super-low airfares and empty seats are inevitable until the end of 2021 as debt-ridden carriers try to stimulate demand. So says the International Air Transport Association (IATA), an airline trade association, which recently revealed updated forecasts showing just how dire the economic outlook is for its members.

IATA says the world’s airlines are expected to lose US$84.3 billion in 2020, and a further US$15.8 billion in 2021. However, its research shows some bright spots for the industry.

“We’ve passed the low point,” said Brian Pearce, chief economist at IATA, during a webinar. “April saw an unprecedented low point for the industry and, aside from a bit of domestic travel in China, the industry was more or less grounded.”

So where’s the upside? “We saw some strong activity in May led by the domestic markets in China, Vietnam and South Korea, which are now within about 25 per cent of where they were last year,” said Pearce. “We saw a slow rise in the Chinese and South Korean domestic market because consumers were very cautious to get back in the air, but we’ve seen a faster recovery in Vietnam and New Zealand.”

Planes parked at Berlin-Brandenburg Airport earlier this month. Photo: Sean Gallup/Getty Images

Overall, international bookings are down 82 per cent this month compared with June 2019, and even if economies unlock soon, international travel won’t. “We’re not expecting to see a recovery to 2019 levels until perhaps 2023, and if there’s a second wave of the virus, until 2024,” said Pearce, describing a smaller aviation industry as “the next normal”.