February 4 2021  |  Industry News

Still to be determined: if 2021 will be the year of recovery

By Laura Shirk

Considering airlines, airport operators, on-site airport employees and civil aerospace, it’s believed that approximately 4.8M jobs (-43%) directly connected to aviation will be lost due to COVID-19

During this week’s webinar, DFWC: 2021 – Year of Recovery?, it was made known that the question mark is a requirement of the title. Hosted by Duty Free World Council, the webinar provided both an international and regional outlook on the travel industry’s current state and future of recovery. Featuring Patrick Lucas, Vice President of Economics, Airports International Council (ACI) World, he reports that the future of recovery is made up of “known unknowns,” which creates some degree of randomness and makes it challenging to offer predictions. He says that governments continue to act and react unilaterally overall and the estimated total airport industry losses amount to $112B USD in 2020.

“[A recovery of the travel industry in a reasonable timeframe requires governments to introduce a consistent testing process to promote travel and move away from restrictive quarantine measures with a coordinated and risked-based approach, which combines both testing and vaccinating as a way forward,]” he shares.

Describing the last decade (pre-COVID-19) as “the golden era of travel,” with Q2 of 2020 taking the hardest hit, global passenger traffic last year experienced a 63% decline as compared to the projected baseline. A simple breakdown of the numbers: the revenues of the 85 busiest hubs in the world were completely wiped out. Listing the direct, indirect, induced and tourism catalytic global socio-economic impact of COVID, Lucas addresses both on-site and off-site employment that is supported by aviation.

A repetitive message among those participating in the webinar: the need to re-open borders safely, improve consumer confidence, support continued digitalization (i.e. develop IATA Travel Pass to create a digital passport and share test or vaccination results with authorities in order to facilitate travel) and experience a strong vaccine pipeline. It’s reported that 76% of passengers will not travel if self-quarantine is a requirement.

A snapshot of the global vaccine pipeline, which is significantly led by Israel and notes that COVID-19 infection rates will dictate travel destinations

Switching from demand to supply, short and medium-term travel restrictions, quarantines and airline capacity reductions will shape recovery. Described as “a tale of two markets,” domestic travel is expected to recover more quickly than international travel and return to 2019 traffic patterns, passenger volumes and retail sales in 2023 due to pent up demand.

A closer look at the supply side of the industry and present-day global airport pax traffic, which shows the Stringency Index per-country and year-on-year pax traffic on both a domestic and international scale

Looking ahead, the fastest growing emerging markets for pax traffic from 2020 – 2040 include Vietnam, India, China and Indonesia, respectively. Approximately 40% of the world’s population currently resides in these countries, which helps to support the forecast that within the next 20 years, 45% of global traffic will pass through airports in the Asia-Pacific region.

Although vaccine deployment and uptake remain to be “known unknowns,” Lucas points out that the long-term fundamentals of air transport still apply – markets with an expanding middle class and working age population will continue to serve as the foundation of the industry. An upside to the global crisis, the respected economist concludes that the impact of COVID-19 has fast-tracked innovation and technology across the channels, categories, trades and teams and introduced NEXTT: New Experience Travel Technology – a vision for the future of air.

Brand News

May 11 2021

Porsche new Hooks Series combines…

​Patrick Dempsey and Porsche Design began collaborating in January, and they have now entered a new phase of their partnership

By Wendy Morley

May 11 2021

Duty Free Global appoints Nathalie…

​Duty Free Global has announced the appointment of Nathalie Roelands as Chief Operations Officer

By Wendy Morley

May 11 2021

Penderyn's new £5 million distillery…

​On May 17, Penderyn will officially open a new distillery in North Wales

By Hibah Noor

May 5 2021

FOREO special edition LUNA™ series…

​Swedish company FOREO has announced that it has become the official Beauty Devices Provider for the first China International…

By Wendy Morley

May 5 2021

Habanos, S.A. reaches total revenues…

Corporación Habanos, S.A., which commercializes the 27 exclusive Habanos brands worldwide,…

By Laura Shirk

May 4 2021

Rituals Cosmetics expands Elixir…

Rituals Cosmetics has extended its Elixir Collection of haircare products to include new professional quality styling products…

By Laura Shirk

May 4 2021

FOREO named among top three skincare…

After closing 2020 with an almighty army of more than 20 million customers and steady growth of sales, skin-tech powerhouse…

By Laura Shirk

May 4 2021

LeVecke and MONARQ announce distribution…

LeVecke Corporation, leading beer, wine and spirits producer, and MONARQ Group, leading independent drinks distributor, have…

By Laura Shirk

May 3 2021

SK-II STUDIO unveils empowering…

Merging animation, live action and storytelling with a big purpose, global prestige skincare brand SK-II returns with its…

By Laura Shirk

Copyright 2021 DutyFree Magazine. All rights reserved. Privacy Policy Sitemap