Page 16 - Islands Business January 2021

2021 Outlook

BLEAK PROSPECTS FOR PACIFIC TOURISM

By Samisoni Pareti Fewer tourists would mean fewer bums to fill airline seats.
“Until the vaccine is ubiquitous, access through testing will
Pacific island countries should not expect international be “critical” to airlines’ survival,” said Harbinson.
travel to resume in earnest until late 2021, travel and aviation Quoting IATA, the International Air Transport Association,
experts have warned. the Australian aviation expert said air travel is not expected
“You should forget the US market for 2021, as well as Eu- to pick up until the later half of this year.
rope and the United Kingdom,” Peter Harbison told a recent “We expect availability of the vaccine will allow travel
meeting of Pacific airline executives. demand to rebound only in the 2nd half of 2021 and see a pos-
“Nearly 550,000 Americans are projected to have died by sibility of turning cash positive at aggregate level only in 4Q
1 April 2021 (from COVID-19), which is more than double the 2021.
mid-November 2020 level. “Hence government support or progress on the use of
“The vaccine rollout is projected to have little impact by testing to accelerate market opening will be critical for the
April 2021. survival of airlines in many regions over the next 6-9 months.”
“For Europe, over a million Europeans are projected to die Projections by IATA suggest that the heavy turbulence and
by 1 April 2021, representing a trebling of mid-November 2020 stormy weather the aviation sector suffered last year due to
numbers. ramifications of the pandemic that saw over 30 airlines around
“For the United Kingdom, nearly 120,000 residents are pro- the world fold or seek financial bail outs, will continue in the
jected to die by April 2021, doubling its mid-November 2020 new year.
level.” Air travel industry revenue will shrink by 50% in 2021, the
Harbison is the chairman emeritus of CAPA – Centre for world travel body predicts, which in turn will shrink the air-
Aviation, an Australian based aviation and travel market intel- line industry further. Airlines will suffer financial loses and will
ligence firm. have to consolidate or restructure if they are to survive.
He was among a number of experts invited to address a IATA believes the 2019 level of 8 billion passenger depar-
virtual seminar for members of ASPA – the Association of South tures worldwide will not be recovered until 2024.
Pacific Airlines recently. At their 8 December 2020 virtual seminar, ASPA chairman
With the exception of Fiji Airways, all Pacific airlines, in- Brett Gebers, CEO of Solomon Airlines, spoke about the vari-
cluding Air New Zealand and QANTAS, are Association mem- ous options members are pursuing to keep afloat.
bers. Due to the impacts of the pandemic, airlines in the islands
Even the performance in 2021 of the region’s largest tourist could be grouped into three main categories, he said.
source market, Australia, is in doubt, Harbison told the ASPA “There’s the first group where you will need to keep throw-
seminar. ing in money to keep them flying.
Quoting projections provided by the world-renowned In- “There’s the second group whereby they can keep flying if
stitute for Health Metrics and Evaluation (IHME) at America’s you throw in some money so it can undergo a restructure.
University of Washington, the CAPA chairman said IHME is pro- “And there’s the third group that will keep on flying with
jecting 1824 deaths in Australia from COVID-19 by April 2021, just some capital injection, as they have been running well
doubling its mid-November 2020 numbers. already.”
A second wave of the deadly virus in February 2021 is also Gebers added that through the Australian Government
predicted. support, a study is underway to provide possible solutions for
IHME projections have been accurate to date, added Harbi- ASPA members.
son. Merging of airlines or securing of new investors could be
Such forecasts, if they come to pass, could be the final nail other options needing further scrutiny, he said.
in the coffin for many Pacific tourism operators. The industry In his presentation, Director General of ASPA, George Fak-
virtually ground to a standstill by the second quarter of 2020 taufon said the grounding of commercial flights and the near
after the world went into a lockdown due to the COVID-19 closure of the region’s tourism industry would severely impact
pandemic. islands that depend heavily on tourism.
With Australians making up 28.9% of total tourists in the This includes Cook Islands, where tourism revenue made up
Pacific Islands in 2019, together with 10.5% from the US, 9.7% 82% of the GDP in 2018, and Guam, where it accounted for
from Europe and 1.6% of the UK, the region stands to lose 90.7%.
more than half of its tourist numbers this year. Fiji is severely impacted too, Faktaufon told airline ex-
It may mean that island destinations will have to fight for ecutives since tourism in the island nation was a F$2 billion
the remaining source markets of New Zealand, China and (US$970K) industry, providing direct employment to more than
probably Taiwan as well. 40,000 people.
These are countries that IHME has endorsed as stable, in
that they have flattened the curve of COVID-19 infections. publisher@islandsbusiness.com

16 Islands Business, January 2021