Principal airline groups in the UAE and the rest of the Gulf Cooperation Council (GCC) region are unlikely to return full passenger operations before the end of the year. However, routes that assist enormous expatriate markets are expected to bounce back more quickly once the coronavirus pandemic is contained, officials noted.
Alexandre de Juniac, Director General and CEO of the International Air Transport Association (IATA), said airline services will return in phases, with the domestic flights re-opening first, followed by regional, continental and intercontinental flights.
“What we have in mind is for the industry to resume operations gradually, step by step… We don’t expect a return to full operations before the end of this year,” Juniac said during a teleconference with the media on Wednesday.
Airlines in the UAE have suspended services in and out of the country’s airports as part of efforts to control the spread of the COVID-19 Virus. A few flights have recently been operated by carriers like Emirates and flydubai, but they’re meant only for the repatriation of stranded tourists and expatriates who want to return home during the pandemic.
It’s not clear yet when the flight suspensions will be lifted, but the longer commercial planes are restricted, the more losses airlines are expected to incur. According to IATA’s latest estimates, the health crisis will see airline passenger revenues drop by $314 billion in 2020, a 55 percent decline compared to 2019.
Prolonged flight suspensions on long-haul routes will be an issue for “connection-flights” in the Gulf, according to Brian Pearce, IATA’s chief economist, but certain markets would spring back to normalcy much quicker than others.
“We do think that domestic markets are likely to open first and long-haul markets will probably be later on, and so that’s obviously an issue for the connection-flights in the Gulf. Having said that, I would imagine, they also serve other markets, in particular, the markets from India to the Middle East which is associated a lot with the economy and workers, visiting friends and relatives. I would expect those markets would probably recover rather more quickly,” Pearce told the media conference.
Markets around the world are heading for a slowdown due to the disturbances caused by the novel coronavirus. The crisis is expected to be at its most severe in the second quarter when the gross domestic product (GDP) is forecast to drop by 6 percent, a huge slump compared to the 2 percent decline in GDP at the height of the global financial crisis.
“Passenger demand closely follows GDP progression. The impact of reduced economic activity in Q2 alone would result in an 8 percent fall in passenger demand in the third quarter,” IATA said.
As of April, the number of flights operated around the world dropped by 80 percent compared to 2019 and this is largely due to widespread lockdowns and numerous travel restrictions imposed by governments to curb coronavirus infections.
Domestic markets are expected to see the start of an upturn in demand in the third quarter of the year, during the first stage of lifting travel restrictions. International flights will resume slower because governments are likely to retain travel restrictions longer, according to IATA.
The number of coronavirus cases in the UAE has so far reached nearly 8,000, while the global count has topped 2.5 million.