IATA reduces air traffic outlook as crisis drags on

PARIS (Reuters) - Global airlines reduced their 2020 traffic forecast on Tuesday, after a small summer rebound evaporated amid renewed coronavirus outbreaks and travel restrictions.

Full-year passenger traffic is set to decline 66%, the International Air Transport Association (IATA) said, compared with a previously forecast 63% decline.

"The improvement that we saw in the summer months has more or less stopped," IATA Chief Economist Brian Pearce said. August traffic was down 75.3% in terms that reflect passenger numbers as well as distance flown, compared with a 79.5% drop in July.

Airlines are pressing governments to abandon quarantines and other travel curbs blamed for worsening the slump, and instead roll-out rapid COVID-19 testing at airports.

Load factors that measure the proportion of aircraft seats filled fell 27.2 points to a record low of 58.5% in August.

"The industry is restarting but it looks as though it’s still burning through cash," Pearce said. Losses will continue to mount throughout 2020, with bookings data pointing to a weak fourth quarter.

August's short-lived improvement was driven by domestic routes, down more most 50% year-on-year, while international traffic was 88% lower.

A rebound in Russia's domestic market, up 3% on last year, contrasts with Australian flights still down 88% and Chinese internal traffic still 19% lower year-on-year, IATA said.

Cargo demand was down 12.6% in August, an improvement on July's 14.4% decline, it also said. The grounding of passenger jets has reduced capacity, supporting prices.

(Reporting by Laurence Frost; Editing by Kirsten Donovan)