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CAPA Live: Americas aviation update, Apr-2021

Analysis

Each CAPA Live, held on the second Wednesday of each month, contains a summary of the latest key developments by region.

In this report:

- In North America – impressive capacity increases amid lower COVID cases.

- South America represents the only region with negative growth in April.

- Americas: COVID-19 cases per country.

- Americas: COVID-19 vaccinations per country.

- USA: a remarkable domestic recovery amid testing times.

- Canada: still at near record lows in capacity, even domestically. 

- Mexico: an impressive domestic and international capacity recovery.

- Colombia: despite high COVID-19 infections, capacity growth is gaining momentum. 

- Brazil: battling COVID-19 may mean supressed capacity for some time.

- Peru: a small market with small capacity gains.

- Argentina: bucking the trend in South America.

In North America –  impressive capacity increases amid lower COVID cases

North America: total capacity as a percentage of 2019 levels, 30-Dec-2019 to 31-Mar-2021

NA capacity

Taking a look through April's Americas regional dashboard, data shows that North America was the second most impressive region this month after Europe, with a 15ppts increase in capacity compared to the prior month.

This is largely due to the 6.5ppts increase in the aircraft fleet in service in the region.

North America: ASK, total seat capacity and total cargo capacity, Mar-2021 vs Apr-2021

na metrics

North America fleet: Mar-2021 vs Apr-2021

na metrics2

South America represents the only region with negative growth in April

South America: total capacity as a percentage of 2019 levels, 30-Dec-2019 to 31-Mar-2021

SA capacity

South America is the only region in Apr-2021 that showed declines in the dashboard indicators.

Although the number of aircraft in service rose, albeit very slightly, capacity declined, by almost 8ppts. This is mainly attributed to Brazil’s increasingly difficult situation dealing with COVID-19.

South America: ASK, total seat capacity and total cargo capacity, Mar-2021 vs Apr-2021

South America Fleet, Mar-2021 vs Apr-2021

sa metrics2

In North America there have been increases in weekly COVID-19 infections during Mar-2021, largely driven by the USA, where numbers had earlier fallen from their Jan-2021 peak.

Mexico has also managed to reduce the number of new cases significantly, whereas in Canada there have recently been near-record levels of new infections.

In South America, Brazil is currently amid one of the worst situations globally. Infections are at a record high, and recent reports suggest that the hospital system continues to be under immense strain.

The concerning data point for Brazil is that that COVID-19 deaths are now exceeding earlier peaks. Other South American nations such as Colombia and Argentina are also experiencing a new wave of the virus. We’ll be taking a look at what these increases have meant for aviation capacity in a moment.

Americas: COVID-19, new weekly cases per country

Americas covid

Taking a look at where some of the major markets within the region are up to in their COVID-19 vaccination rollout: along the vertical axis is the percentage of the population that has currently received one or more doses, and along the horizontal axis is the total number in the population that has received a vaccine.

As can be seen, many countries are struggling to roll out the vaccine programme, largely due to supply issues, however one country is ahead of the pack, and demonstrating one of the most successful vaccine rollouts in the world – and that’s the USA.

As much as 52% of the population have now received one or more vaccination shots, and last week the country broke the record of the highest number of vaccines administered in one day, at more than 4 million.

Americas: current COVID-19 vaccination rates, total number and percentage of the country's population 

americas vaccine

It’s clear that the USA has experienced significantly high levels of COVID-19 infection, but what is surprising is the level to which the American domestic market has recovered; as optimism grows, or as some commentators have argued, ‘Americans are done with the virus, even if the virus isn’t done with Americans’. 

Unlike most other countries with high infection rates, such as those in mainland Europe, the USA has had a far more liberal approach to travel and movement, leading to peaks in travel over Thanksgiving in November 2020 and Christmas 2020. But in recent weeks domestic capacity has even exceeded those peaks, and continues to climb back towards that all-important 2019 benchmark.

With the summer season approaching it’s projected that capacity will continue and reach a new peak of capacity. What is interesting is that airlines such as American Airlines are planning to reactivate fleet to meet demand, and others are proactively rehiring crew.

International capacity also continues to rise, although not as quickly as in domestic. That having been said, international capacity is now far higher than what was seen in the first wave of COVID in Apr-2020.

USA: domestic capacity, Dec-2019 to Dec-2021

usa dom

USA: international capacity, Dec-2019 to Dec-2021

With the USA’s international capacity exceeding many expectations, it’s natural to look at the destinations of those seats. Typically, much of this capacity would head north towards Canada, however from the data, this is clearly not the case.

International capacity for Canada remains at near record lows, ever since the first wave of COVID-19. Domestic capacity for Canada also remains significantly supressed, and with cases continuing to rise, projections for the country are not as optimistic as for its southern neighbours.

Canada: domestic capacity, Dec-2019 to Dec-2021

canadadom

Canada: international capacity, Dec-2019 to Dec-2021

canadaint

Mexico: an impressive domestic and international capacity recovery

Mexico’s new COVID-19 cases have followed a similar pattern to that of the USA, with a large peak over the Jan-2021 period.

However, what is obvious as a direct comparison is the fact that domestic capacity has recovered significantly. As the calendar crossed into Apr-2021 capacity was at 83% of 2019 levels, one of the most impressive domestic recoveries in the region, and certainly one of the most impressive cases of recovery in a country that still has high infection rates.

Something to look out for will be what happens over the summer months as US travellers continues to fly abroad; much of this capacity is likely to head to top tourist destinations in Mexico.

Mexico: domestic capacity, Dec-2019 to Dec-2021

mexdom

Mexico: international capacity, Dec-2019 to Dec-2021

mexint

Colombia is, once again, another example of high infection rates, but clearly this hasn’t deterred travellers from flying – especially domestically.

Both the domestic and the international projections for the country are positive.

Colombia: domestic capacity, Dec-2019 to Dec-2021

coldom

Colombia: international capacity, Dec-2019 to Dec-2021

colint

Despite suffering from one of the worst COVID-19 situations globally, Brazil’s domestic capacity recovered strongly in the latter half of 2020.

However, with the increase in cases capacity has now begun to fall, since Jan-2021.

International capacity remains low, and although decreasing, is expected to rise over the summer if the COVID situation is brought under control. Until then, local holiday-makers are expected to travel domestically and international visitors are likely to stay away.

Brazil: domestic capacity, Dec-2019 to Dec-2021

brazildom

Brazil: international capacity Dec-2019 to Dec-2021

brazil int

Peru is struggling with a new wave of COVID-19 infections, however, interestingly, unlike the case with many of its close neighbours, capacity hasn’t increased as much.

International capacity remains very low, and domestic is currently at only 37% of 2019 levels. It is worth noting that Peru’s aviation market is relatively small, therefore may be susceptible to other external forces during its recovery.

Peru: domestic capacity, Dec-2019 to Dec-2021

perudom

Peru: international capacity, Dec-2019 to Dec-2021

peruint

Argentina – a country that appears to have bucked the trend of the continent. With high levels of COVID-19 infections remaining in the country, capacity has not really increased all that much throughout 2020.

Since the start of 2021 capacity has remained level overall, however while domestic seats have increased, international capacity has declined.

Argentina: domestic capacity, Dec-2019 to Dec-2021

ardom

Argentina: international capacity, Dec-2019 to Dec-2021

arint

Something that’s super interesting to note from the Americas region is that although COVID-19 remains prevalent in almost all countries, capacity has recovered at astonishing rates.

Without comparing it to the likes of China and South Korea, where COVID-19 infections have been all but eliminated, Latin American countries seem to be taking a completely different strategy.

The USA and China currently have similar levels of domestic capacity, but the former nation has one of the highest infection rates globally, whereas China has one of the lowest. It’ll be interesting to see what the future holds for aviation in the countries within the Americas region once the virus is brought under control.

So that’s it for the Americas round-up; to see analysis of how COVID-19 has affected countries in your region, or any other region, please watch my other regional round-ups on today’s CAPA Live.

Thanks for joining.

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