Mideast virus quarantine measures not working, says IATA

Mideast virus quarantine measures not working, says IATA
International flights in Saudi Arabia are not due to restart until January at the earliest. (Shutterstock)
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Updated 27 November 2020

Mideast virus quarantine measures not working, says IATA

Mideast virus quarantine measures not working, says IATA
  • International Air Transport Association predicts economic impact of COVID-19 will be felt for years to come

JEDDAH: Saudi Arabia and the Middle East will feel the damaging economic impact of the coronavirus disease pandemic on the aviation sector for many years to come, according to a leading global industry organization.

And the only way to help the recovery is to eliminate quarantine measures and introduce systematic testing of passengers, said the International Air Transport Association (IATA).

The latest figures issued by the IATA forecast global airlines to lose a total of $157 billion this year and next, with those in the Middle East set for 2020 losses amounting to $7.1 billion, and $3.3 billion in 2021.

“Saudi Arabia, just like other countries, was impacted a lot because of its large networks and large carriers that are operating not by Saudi carriers only . . . Saudi Arabia has around 94 international carriers flying in and out of the country, and all those were stopped,” Muhammad Ali Albakri, IATA regional vice president for the Middle East and Africa, told Arab News.

He pointed out that due to its strategic geographical position the Middle East had a high degree of connectivity, with 1,060 routes as of April 2019.

All flights in, out, and within Saudi Arabia were grounded in March. While domestic flights restarted in May and Riyadh has reported that the volume of traffic has recovered to nearly 60 percent, international flights are not due to restart until January at the earliest.

FASTFACT

43%

IATA expects Middle East airline revenues to improve by 43 percent next year compared to 2020.

As a result, IATA said that Saudi Arabia’s air connectivity score this year dropped by96 percent, which was the biggest in the region and compared to 89 percent in the UAE.

The negative impact of COVID-19 on aviation revenues and passenger demand will be felt for years, the association added.

It predicted that the Middle East’s revenues for 2021 would improve by 43 percent — compared to 2020 — but would still be down 16 percent from the peak before COVID-19, equating to about $68.5 per passenger.

“The forecast for 2021 is better than 2020 but would not be enough because it is expected to remain negative in the territory and revenues, due to delays in anticipated recovery that was expected in the second half of 2020, but did not happen,” Albakri said.

One of the ways in which the region could speed up the economic recovery from COVID-19 would be to eliminate quarantine measures and adapt systematic testing of passengers,  IATA said.

Sixteen countries in the Middle East have opened their borders to regional and international air travel, but nine of these still have quarantine measures in place, which IATA said equates to a closed border.

“Reopening borders safely is a must, it’s no longer an alternative, it really has to happen and has to happen quickly. Quarantine cannot work, countries cannot continue to rely on closing their borders, or opening the borders but requiring quarantines,” Albakri added.

IATA is calling for the systematic testing of passengers without the need for quarantine on arrival, which will enable governments to safely open borders and help their economies to recover from the impact of the pandemic and control the spread of the disease.

“We are advocating systematic testing is the safe alternative to reopen borders; testing that is scalable, affordable, accurate, and fast in delivering the results is the way forward,” Albakri said.

The association noted that the Middle East’s high level of connectivity would also help aviation companies play a key role in the transportation of COVID-19 vaccines worldwide. In order for this to happen, it said governments in the region needed to work closer together and adopt internationally accepted measures and procedures.

“Countries in the region have to start working together to support the delivery of COVID-19 vaccines, not only to the need of the region’s countries and populations but also to act as a shipping hub between East and West to help vaccines to be transported safely and securely around the world,” Albakri added.

He said that IATA was working with all countries in the Middle East directly, and in cooperation with the International Civil Aviation Organization and the Arab Civil Aviation Organization, to merge paths and efforts to adopt a unified methodology, and that a proposal had been prepared for Arab transport and health ministers to take onboard.


WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range
Updated 31 min 1 sec ago

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

Oil prices have been stable since early January, with Brent crude price hovering around $55. Brent crude closed the week slightly higher at $55.41 per barrel,
while West Texas Intermediate (WTI) closed slightly lower at $52.27 per barrel.

Oil price movement since early January in a narrow range above $50 is healthy, despite pessimism over an increase in oil demand, while expectations of US President Joe Biden taking steps to revive energy demand growth are
still doubtful. The US Energy Information Administration (EIA) reported a hike in US refining utilization to its highest since March 2020, at 82.5 percent. The EIA reported a surprise weekly surge in US commercial crude stocks by 4.4
million barrels. Oil prices remained steady despite the bearish messages sent from the International Energy Agency (IEA), which believes it will take more time for oil demand to recover fully as renewed lockdowns in several countries weighed on oil demand recovery.

The IEA’s January Oil Market Report came as the most pessimistic monthly report among other market bulletins from the Organization of the Petroleum Exporting Countries (OPEC) and EIA. It forecast oil demand will bounce back to 96.6 million bpd this year, an increase of 5.5 million bpd over 2020 levels.

Though the IEA has lowered its forecast for global oil demand in 2021 due to lockdowns and vaccination challenges, it still expects a sharp rebound in oil consumption in the second half of 2021,
and the continuation of global inventory depletion.

The IEA reported global oil stocks fell by 2.58 million bpd in the fourth quarter of 2020 after preliminary data showed hefty drawdowns toward the end of the year. The IEA reported OECD industry stocks fell for a fourth consecutive month at 166.7
million barrels above the last five-year average. It forecast that global refinery throughput is expected to rebound by 4.5 million bpd in 2021, after a 7.3 million bpd drop in 2020.

The IEA monthly report has led to some short term concern about weakness in the physical crude spot market, and the IEA has acknowledged OPEC’s firm role in stabilizing the market.

Controversially, the IEA believes that a big chunk of shale oil production is profitable at current prices, and hence insinuated that shale oil might threaten OPEC market share.

It also believes that US shale oil producers have quickly responded to oil price gains, winning market share over OPEC producers. However, even if US shale oil drillers added more oil rigs for almost three months in a row, the number of operating rigs is still less than half that of a year ago, at 289 rigs.

The latest figures from the Commodity Futures Trading Commission show that crude futures “long positions” on the New York Mercantile Exchange are at 668,078 contracts, down by 18,414 contracts from the previous week (at 1,000 barrels for each contract).