Skytra and IATA today published its first weekly report on the impact of the Covid-19 virus on regional revenues of the global airline industry.
This shows that airline revenue in Asia-Pacific (APAC) in 2020 for the week March 26 – April 1 has fallen 93% from the same period in 2019 as the region was first to suffer from the contagion of the virus originally detected in China. In Europe and North America (Canada-US) the decline was 102% and 96% respectively for the same period.
IATA is a key data vendor for Airbus’ wholly owned subsidiary Skytra. Since IATA is the world’s largest data provider of air travel ticketing information, the partnership provides Skytra with pricing details of over 83% of global tickets issued by value.
Overall, IATA estimates that the unfolding impact of the pandemic on airlines’ revenues may fall by 44% this year, or $252 billion.
Mark Howarth, Skytra’s chief executive, said: “The challenges confronting the global air travel industry are formidable. Through this data we hope to inform the discussions about the airline industry during the Covid-19 pandemic. Likewise this crisis illustrates how urgently the air travel industry needs dedicated risk management tools.”
IATA’s data will support the formulation and calculation of indices developed by Skytra to underpin a new class of futures and options contracts, enabling the $1 trillion per annum air travel industry to manage its exposure to revenue volatility for the first time.
IATA’s unique data are generated by its payment settlement platforms, reporting the prices paid for tickets sold directly by almost 500 airlines and indirectly sold by them through travel agents. The data captured more than 1.6 billion tickets issued in 2019 covering over 212 countries.
This strategic partnership reflects Skytra’s purely data based approach towards its index construction, management and calculation.
Skytra’s indices will measure the daily change in the average price of air travel within and between regions across the globe. The indices’ values will be used as the underlying basis for standardised futures and options contracts that Skytra will admit to trading on its regulated venue.
Skytra is currently developing the venue with leading market technology provider, Nasdaq, and expects to start trading in late 2020, subject to regulatory approval.
Skytra has applied to the UK’s Financial Conduct Authority to be registered as a Benchmark Administrator of its air travel price indices and for a licence to operate a Multilateral Trading Facility (MTF), where derivatives based on the indices will trade. Skytra announced in January that it had selected Nasdaq to provide the technology for the planned derivatives trading venue.