Airlines heading for record $84b annual loss in 2020
The global airline industry is heading for a record annual loss of $84 billion as 2020 goes down as the "worst year in the history of aviation" in the wake of the devastating coronavirus lockdown, the sector's world body predicted on Tuesday.
On top of the $84 billion net losses this year, the International Air Transport Association forecast supplementary losses of $15.8 billion in 2021, extending the total losses to about $100 billion largely attributable to the pandemic as recovering traffic remains well short of pre-crisis levels, and airlines slash fares to win business.
"By comparison, airlines lost $31 billion with the Global Financial Crisis and oil price spike in 2008 and 2009. There is no comparison for the dimension of this crisis," it said.
"Financially, 2020 will go down as the worst year in the history of aviation," said Alexandre de Juniac, Iata Director General of Iata, the industry body representing 290 global carriers.
Airline passenger traffic is expected to rise 55 per cent in 2021 from its depressed level this year, while still remaining 29 per cent below its 2019 level, the Iata said in an updated forecast.
As the air travel recovery gathers pace in Asia and takes root in Europe and North America, airlines are counting the cost of many weeks of lost business, an increased debt pile and a diminished outlook for future demand.
Iata research "shows that people will return to flying as soon as borders open" and carriers had to be prepared for an orderly resumption once demand returns in line with health guidelines.
"The outlook is challenging to say the least. But aviation is a resilient industry," De Juniac added. "With a globally harmonised and mutually recognised approach to the re-start measures, we can rebuild the confidence of travelers and kick-start the recovery in aviation and more broadly.
He added the sector hoped that a range of safety measures including more effective mass testing would "give governments the confidence to re-open borders without quarantine measures" as "if quarantine is introduced economies are effectively kept in lockdown for the purposes of travel."
The Iata chief warned of a growing debt burden as despite government relief measures that had grown by $120 billion to $550 billion - equivalent to some 92 per cent of expected 2021 revenues.
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