Impact of COVID-19 on CAREC Aviation and Tourism
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Impact of COVID-19 on CAREC Aviation and Tourism - Asian Development Bank
1 Introduction
The coronavirus disease (COVID-19) pandemic has had a devastating impact on the aviation industry globally as nearly all air travel came to a halt in late March and April 2020. The Central Asia Regional Economic Cooperation (CAREC) countries were no exception as virtually all scheduled international flights were suspended and several countries also implemented bans on domestic air travel in an attempt to contain the spread of COVID-19. All CAREC countries arranged repatriation flights to bring citizens stranded overseas home but this traffic was very limited compared to normal volumes.
Domestic markets in CAREC started reopening in May and most domestic routes have now resumed. However, domestic passenger traffic is still below precrisis levels in most CAREC countries and will likely not fully recover until after the pandemic.
As of the beginning of October 2020, most international flights remained suspended and a large portion of the CAREC passenger aircraft fleet was still grounded.
There are about 25 airlines based in CAREC offering scheduled passenger services. There are a few domestic airlines but most airlines in CAREC rely mainly or entirely on the international market for generating revenues.
In most CAREC countries, scheduled international flights resumed in July, August, and September. As of October, only two CAREC countries—Mongolia and Turkmenistan—have not resumed any scheduled international flights and were still relying on chartered flights to carry repatriating citizens.
Border restrictions remain in place throughout CAREC, impacting demand for international air travel and limiting tourism. International passenger traffic volumes in CAREC now are a tiny fraction of what they were prior to the pandemic. As of September 2020, international passenger traffic to and from and within CAREC was still down by well over 90% compared to that of the previous year.
More international services are expected to gradually resume over the next several months. However, travel restrictions are likely to remain in place for several destinations, including quarantine requirements. Most CAREC citizens will also likely be wary of traveling abroad for some time and will choose to take holidays, if any, domestically.
The recovery of international passenger traffic will be very slow. International traffic is expected to still be at a small fraction of pre-crisis levels in 2021 and not fully recover until at least 2023.
The reduction in international passenger traffic for 2020 and associated reduction in tourism will have a huge economic impact. This study assesses the impact of COVID-19 on aviation and tourism in CAREC and provides some recommendations on how to potentially mitigate this impact and achieve a recovery rate that is faster than the global average.
2020 has been an extremely challenging year for aviation and tourism. 2021 will similarly be very challenging. However, there are opportunities to use this crisis to improve CAREC’s long-term position.
This crisis provides an opportunity to reset CAREC’s aviation industry through reforms, new strategies, and restructurings. This study looks briefly at some of these opportunities and makes some initial recommendations. It also provides a broad level assessment of the impact on CAREC with the objective of highlighting the gravity of the current situation and starting a dialogue.
This study is intended as a first step in a wider project to fully assess the impact of COVID-19 and identify a comprehensive list of recommended measures and policies to help CAREC countries mitigate the impact and recover. As part of the next phase in this project, the Asian Development Bank aims to engage with CAREC’s aviation community, which will include conducting an aviation workshop to be held in the fourth quarter of