The International Air Transport Association on Tuesday predicted heavier losses for the aviation industry in 2020 and 2021.
In a report titled ‘Deep losses continue into 2021’, IATA predicted a net loss of $118.5bn for 2020, which is higher than the $84.3bn forecast in June.
IATA also predicted a net loss of $38.7bn in 2021 (higher than the $15.8bn forecast in June).
However, it explained that the second half of 2021 is expected to record improvements after a difficult first half.
IATA recommended aggressive cost-cutting as the solution to drive increased demand in 2021, with hopes that either a vaccine or safe re-opening of borders would turn the industry around.
IATA’s Director General and CEO, Alexandre de Juniac, said, “This crisis is devastating and unrelenting. Airlines have cut costs by 45.8 per cent, but revenues are down 60.9 per cent.
“The result is that airlines will lose $66 for every passenger carried this year for a total net loss of $118.5bn. This loss will be reduced sharply by $80bn in 2021.
“The prospect of losing $38.7bn next year is nothing to celebrate. We need to get borders safely re-opened without quarantine so that people will fly again. And with airlines expected to bleed cash at least until the fourth quarter of 2021 there is no time to lose.”
Passenger numbers are expected to plummet to 1.8 billion (60.5 per cent down on the 4.5 billion passengers in 2019), while passenger revenue is expected to fall to $191bn, less than a third of the $612bn earned in 2019.
The development is largely driven by a 66 per cent fall in passenger demand measured in Revenue Passenger Kilometres.
International markets were hit disproportionately hard by the COVID-19 pandemic with a 75 per cent fall in demand, the report noted.
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