A report titled ‘The Impact of COVID-19 on CAREC Aviation and Tourism’ thatwas released by the Asian Development Bank (ADB) revealed that whilePakistan had announced the value for COVID-19 economic stimulus packages as$5 billion, it did not have any aviation-specific benefits, where most jobswere at risk among the Central Asia Regional Economic Cooperation (CAREC)countries.
This report covers ten CAREC countries (excluding China), and shows thecombined figures for Afghanistan, Azerbaijan, Georgia, Kazakhstan, theKyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, andUzbekistan.
According to the report, the estimated airline traffic reduction for theCAREC in 2020 was 40 million passengers; the estimated airport trafficreduction for the CAREC in 2020 was 46 million passengers; the estimatedpassenger revenue impact for the CAREC in 2020 was $7 billion; and theestimated travel and tourism jobs in the CAREC that were at risk in 2020[International Air Transport Association (IATA) methodology] was 1 millionjobs.
The report also estimated the reduction in international visitor spend forthe CAREC in 2020 to be at $11 billion; the estimated reduction in traveland tourism GDP contribution for the CAREC in 2020 at $27 billion, theestimated reduction in visitor numbers for the CAREC in 2020 at 33 millionvisitors; the estimated reduction in visitor arrivals by air for the CARECin 2020 at 5.5 million visitors; and estimated required financial supportfor the CAREC airlines at $2 billion.——————————
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The largest aviation market in the CAREC is Pakistan, which accounts for athird of all the passenger traffic in the CAREC. Pakistan is, by far, themost populated CAREC country, although the size of its air transport sectoris very small as compared to its large population (over 200 million),stated the report.
Pakistan and Kazakhstan are the only CAREC countries with sizable domesticair transport markets, and when combined, they account for nearlythree-quarters of all domestic passenger traffic in the CAREC. Kazakhstanand Pakistan also have the largest domestic markets of the CAREC countries,and are, therefore, proportionately less impacted. However, Pakistan is thelargest market of them all and accounts for 38 percent of all the CARECorigin and destination traffic.
In April, the IATA projected a 50 percent decline in the origin anddestination passenger traffic, including a 52 percent decline for Pakistanthat resulted in a decline of 9.87 million fewer origin and destinationpassengers.
The IATA also projected a $1.83 billion decline in passenger revenues forPakistan, but has not updated these figures and has not included any otherCAREC country in its country-wise breakdown.
The association also said in April 2020 that 259,400 jobs in Pakistan wereat risk because of the expected decline in passenger traffic. The IATA hasnot provided jobs at risk projections for the other CAREC countries butusing the IATA methodology, this study estimates that 1 million travel andtourism jobs are at risk in the CAREC. It also estimates that 1.5 millionjobs of the 65.5 million global jobs are in the CAREC countries and that 1million are at risk. Of them, Pakistan has the most jobs at risk, followedby Georgia.
Pakistan and some other CAREC countries have a disproportionately highlevel of airline and aviation employees, given the size of their airtransport markets due to inefficiencies.
It further stated that Pakistan has a large aviation market but only 17,000of its 3.2 million visitors in 2018 had arrived on tourist visas. Pakistanhas more significant volumes of business visitors that arrive by air butinternational flights in Pakistan mainly cater to the outbound segment,particularly the Pakistanis who travel overseas for work.
Pakistan has the largest domestic tourism market in the CAREC, with around50 million domestic trips per annum. This is not surprising, as it has alarge population and geographic size, and a relatively low volume ofoutbound international travelers. Based on data from the 2019 World Travel& Tourism Council (WTTC), 93 percent of Pakistan’s travel and tourismspending had been on domestic travel.
Aviation will also benefit somewhat from growth in domestic tourism,particularly in the main domestic markets of Kazakhstan and Pakistan.
Pakistan has the potential to become a large source market for severalCAREC countries. Although it is predominantly the most populated CARECcountry, there are only around 60,000 Pakistani visitors per annum to allthe other CAREC countries combined. Almost all the CAREC countries stillrequire visas for Pakistan residents. Pakistan is, therefore, a largepotential source market for the other CAREC countries.