GENEVA - Airlines are heading towards US$84.3 billion in losses with a -20.1% net profit margin and a 50% revenue drop to US$419 billion in 2020 due to travel restrictions imposed during the coronavirus pandemic (COVID-19), says the International Air Transport Association (IATA).
“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,” IATA CEO Alexandre de Juniac said in an official statement, Tuesday (9/6).
“That’s why government financial relief was and remains crucial as airlines burn through cash.”
In addition, IATA also forecasts that all regions will post losses this year, with Asia-Pacific projected to suffer the largest losses at US$29 billion due to the region being the first to take the blow of the COVID-19 crisis. On the other hand, Europe is predicted to enjoy gradual recovery as intra-European travel restrictions are lifted progressively.
2021, according to IATA, will likely see rising demand that will result in lower losses at US$15.8 billion with a -2.6% net profit margin and a 42% revenue surge to US$598 billion. However, Mr de Juniac warns that the airline industry will remain “financially fragile” in the year.
“The challenge for 2022 will be turning reduced losses of 2021 into the profits that airlines will need to pay off their debts from this terrible crisis,” he remarked. (MS)