IATA says airlines to lose $84.3 bn in 2020 due to COVID-19; suggests recovery measures

Global airlines body IATA on Tuesday released its financial outlook for the global air transport industry forecasting that "airlines are expected to lose $84.3 billion in 2020 for a net profit margin of -20.1%".

The International Air Transport Association said revenues will fall 50% to USD 419 billion in 2020 from USD 838 billion in 2019. In 2021, losses are expected to be cut to $15.8 billion as revenues rise to $598 billion.

'Worst year in the history of aviation'

"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," Alexandre de Juniac, IATA's Director General and CEO said in a statement.

"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," he added. IATA has around 300 airlines as its members that handle around 82% of the total global air traffic.

De Juniac said that provided there is not a second and more damaging wave of COVID-19, the worst of the collapse in traffic is likely behind the industry. He states that the 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."

READ | 'Evidence says Covid transfer risk in flights is low; don't leave middle seat empty': IATA

He warned that airlines will "still be financially fragile in 2021". "Passenger revenues will be more than one-third smaller than in 2019. And airlines are expected to lose about $5 for every passenger carried. The cut in losses will come from re-opened borders leading to increased volumes of travellers," said Juniac.

READ | IATA backs use of face masks on flights but refuses to leave middle seat empty

Several countries globally had put severe restrictions on movement in a bid to curb the spread of COVID-19. Indian airlines have been allowed to fly on domestic routes in a graded manner from May 25 after two months of grounding of all operations due to the pandemic. However, the government has not yet decided on the timeline for resumption of international services.

READ | '14-day quarantine' will inhibit flyers even if global aviation resumes: IATA survey 

READ | IATA, UPU warn of air capacity shortage, call for swift action to keep the mail moving

(With PTI inputs)