Aviation

CAPA predicts 60 per cent recovery in Australia’s domestic capacity by Christmas

One of the travel industry’s leading intelligence agencies projects domestic air capacity could reach 60 per cent of last year’s volume by mid-December.

Based on a combination of analysis of government statements, airline projections and underlying demand, CAPA’s ‘Airline Capacity Model’ projects a slow, phased recovery in domestic air capacity in Australia through the remainder of 2020.

Reaching 37 per cent of last year’s volume by early July, Prime Minister Scott Morrison has foreshadowed a return to intra-state travel under the federal government’s three-phase plan to ease coronavirus restrictions.

The plan, designed to revive the domestic economy, leaves the timing for the re-establishment of travel to the states, the market intelligence agency said.

“Australia is one of the best-positioned countries globally to suppress the first wave of COVID-19 infection,” CAPA chairman emeritus Peter Harbison said.

“If this continues and we avoid a second outbreak, the Australian domestic air market could see some signs of life by mid-year and a steady improvement by Christmas.

“However, we don’t expect to see 2019 levels of domestic flying reached again this year. International will be hit harder and potentially take multiple years to recover.”

CAPA’s breakdown of domestic seat capacity through the COVID-19 pandemic

CAPA projects domestic capacity to reach 49 per cent of 2019 levels by the October school holidays and 60 per cent by mid-December 2020.

It also expects a supply-led return over the coming three months as airlines tempt passengers back to the air with low fares while “emphasising enhanced health and safety precautions”.

“As demand rebuilds, supply (capacity and route network) will be adjusted to optimise yields and the market will steadily recover,” the agency said.

International markets are, however, unlikely to recover and the CAPA Airline Capacity Model sees international air capacity (seat numbers) still down by 92 per cent year-on-year in July, by 86 per cent in October and by 85 per cent in December.

The potential trans-Tasman ‘travel bubble’ with New Zealand has been factored into the CAPA Model from August, with some Pacific Islands linkages in time for the Christmas and New Year holidays.


Featured image: iStock/stellalevi

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