‘Financially, 2020 will go down as worst year in history of aviation,’ says International Air Transport Association
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 $84.3 billion in 2020 for a net profit margin of 20.1%.
“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 $230 million to industry losses. In total, that’s a loss of $84.3 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 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% 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, said IATA.
De Juniac said that the figures are based on an estimate of 2.2 billion passengers this year and that airlines will lose $37.54 per passenger.
He said that was why government financial relief remained crucial as airlines “burn through cash.”
IATA said that 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 that about 10% 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% of travelers will be eager to recommence travel within a few months of the pandemic coming under control.