Time to reconnect North America and Europe

COVID-19

One Ocean, Two Shores: Time to Reconnect

Ezgi Gulbas

Senior Economist

28th July 2021

1

Mid-year but not mid-of the crisis for international travel

Int. RPKs -80.9%, domestic RPKs -22.4%, CTKs +9.9% (Jun 21 vs Jun19)

RPKs and Seasonally adjusted CTKs (indexed, Jan 2020 = 100)

120

Cargo tonne km (CTKs)

110

1st Half 2021 vs 1st Half 2019

100

✓ Revenue Passenger

90

Domestic RPKs

80

Kilometers (RPKs): -66.7%

✓ Domestic: -33.1%

70

60

✓ International: -85.8%

50

✓ Cargo Tonne Kilometers

40

(CTKs): +8.0%

30

International RPKs

20

10

0

Mar-19

Apr-19

May-19

Jul-19

Aug-19

Sep-19

Oct-19

Nov-19

Dec-19

Mar-20

Apr-20

May-20

Jul-20

Aug-20

Sep-20

Oct-20

Nov-20

Dec-20

Jan-21Feb-21Mar-21Apr-21May-21Jun-21

Jan-19

Feb-19

Jun-19

Jan-20

Feb-20

Jun-20

Source: IATA Economics using data from IATA Monthly Statistics

Vaccination progresses but travel controls remain strict

75% of countries have strict requirements beyond screening

Global Vaccination Progress

Total vaccination doses administered per 100 population
90	Europe
80
70	North
America
60
50	World
40
30
20
10
0
Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21

International Travel Controls
	Globally		Number of
	182	182
	countries
Total border closure	28	23
Ban on		60	3 among
67	every 4
high-risk regions		countries
			have strict
			international
		52	travel
Quarantine from	44	controls
high-risk regions
Screening	43	46
No measures	0	1
	Jan-21	Jun-21

Source: IATA Economics using data from Oxford University and Our World in Data

Connectivity across North Atlantic remains limited

Governments are risk averse despite rapid vaccination on both ends

Flights between North America and Europe 45000

40000

35000
30000	-73%
25000

20000

15000

10000

5000

0

Jun-21

May-21

Apr-21

Mar-21

Feb-21

Jan-21

Dec-20

Nov-20

Oct-20

Sep-20

Aug-20

Jul-20

Jun-20

May-20

Apr-20

Mar-20

Feb-20

Jan-20

Dec-19

Nov-19

Oct-19

Sep-19

Aug-19

Jul-19

Jun-19

May-19

Apr-19

Mar-19

Feb-19

Jan-19

Source: IATA Economics using OAG data

North Atlantic routes key for Europe and the US…

…representing the main source of their international pax revenues

Key international revenue markets for the US,

% share of total US int'l passenger revenues

Key international revenue markets for Europe,

% share of total Europe int'l passenger revenues

35%

30%

25%

20%

15%

10%

35%

30%

25%

20%

15%

10%

5%

5%

0%

0%

Source: IATA Economics using DDS

Source: IATA Economics using DDS, *Europe refers to EU27, UK, Norway and Switzerland combined