By Chinedu Eze
The International Air Transport Association (IATA) has released its financial outlook for the global air transport industry, stating that airlines are expected to lose $84.3 billion in 2020.
The global body said revenues would fall 50 per cent to $419 billion from $838 billion in 2019.
In 2021, losses are expected to be cut to $15.8 billion as revenues rise to $598 billion.
“Financially, 2020 will go down as the worst year in the history of aviation. On average, every day of this year will add $230 million to industry losses. In total that’s a loss of $84.3 billion. It means that—based on an estimate of 2.2 billion passengers this year—airlines will lose $37.54 per passenger. That’s why government financial relief was and remains crucial as airlines burn through cash,” said IATA’s Director General and CEO, Alexandre de Juniac.
“Provided there is not a second and more damaging wave of COVID-19, the worst of the collapse in traffic is likely behind us. A key to the recovery is universal implementation of the re-start measures agreed through the International Civil Aviation Organisation (ICAO) to keep passengers and crew safe.
“And, with the help of effective contact tracing, these measures should give governments the confidence to open borders without quarantine measures. That’s an important part of the economic recovery because about 10 per cent 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,” de Juniac added.
Passenger demand evaporated as international borders closed and countries locked down to prevent the spread of the virus. This is the biggest driver of industry losses.
At the lowest point in April, global air travel was roughly 95 per cent below 2019 levels. There are indications that traffic is slowly improving. Nonetheless, traffic levels (in Revenue Passenger Kilometer) for 2020 are expected to fall by 54.7 per cent compared to 2019.