Battered consumer confidence to slow airline recoveries: IATA

Faltering consumer confidence will slow the recovery of air travel once coronavirus restrictions end, the sector’s main global body warned on Tuesday, citing bleak new survey data.

More airlines will follow Virgin Australia into administration without swifter government support, the International Air Transport

Association (IATA) predicted, and fuel hedging will prevent many from benefiting from cheap oil.

Domestic and short-haul travel will pick up first, IATA said, but the demand upturn has been tepid in China and absent in Australia.

“Once market travel restrictions and lockdowns are relaxed, there’s still an issue about whether there will be demand from passengers to come back and fly,” IATA Chief Economist Brian Pearce said during an online presentation.

The Geneva-based organization expects the near-total shutdown of global aviation to cut industry revenue this year by more than half, with the $314 billion hit threatening 25 million jobs, and is backing airline demands for government support.

The online poll of 4,700 consumers was conducted by Rockland Dutton with sample sizes of 300 to 500 in each of 11 countries.

In Europe, where the cycle of COVID-19 spread, containment and travel reopening is lagging behind Asia, carriers have locked in fuel costs through hedging, Pearce said.

“The example of Virgin Australia is a perfect illustration of the warning we have put forward and the requests we have,” he said.