Airline industry may lose over $84-B in 2020

The IATA chief, however, said if there is not a second and more damaging wave of coronavirus disease 2019 (Covid-19), the worst of the collapse in air traffic is likely over. (Pexels photo)

GENEVA – The International Air Transport Association (IATA) on Tuesday said its financial outlook for the global air transport industry shows that airlines are expected to lose USD84.3 billion in 2020 for a net profit margin of -20.1 percent.

“Financially, 2020 will go down as the worst year in the history of aviation,” said Alexandre de Juniac, IATA’s Director General and CEO.

“On average, every day of this year will add USD230 million to industry losses. In total, that’s a loss of USD84.3 billion,” he said, noting that all regions will post losses in 2020.

The IATA chief, however, said if there is not a second and more damaging wave of coronavirus disease 2019 (Covid-19), the worst of the collapse in air traffic is likely over.

“A key to the recovery is the universal implementation of the re-start measures agreed through the International Civil Aviation Organization (ICAO) to keep passengers and crew safe,” said the IATA chief.

Revenues will fall 50 percent to USD419 billion from USD838 billion in 2019. In 2021, losses are expected to be cut to USD15.8 billion as revenues rise to USD598 billion, said IATA.

De Juniac said the figures are based on an estimate of 2.2 billion passengers this year and that airlines will lose USD37.54 per passenger.

He said that was why government financial relief remained crucial as airlines “burn through cash.”

IATA said passenger demand evaporated as international borders closed and countries locked down to prevent the spread of the novel coronavirus leading to the biggest driver of industry losses.

De Juniac said about 10 percent of the world’s GDP is from tourism, and much of that depends on air travel.

“Getting people safely flying again will be a powerful economic boost,” he said.

IATA said that the gradual reopening of air travel is likely to be progressive, starting with domestic markets, followed by regional and, lastly, international.

Its research suggests that some 60 percent of travelers will be eager to recommence travel within a few months of the pandemic coming under control. (Anadolu)