The coronavirus crisis will result in record-high losses for the air travel industry, IATA has warned.
UPI’s Don Jacobson reported the news:
The global air transport industry faces losses of $84 billion this year and $15 billion in 2021 due to a steep drop in demand triggered by the coronavirus pandemic, an industry report predicted Tuesday.
The International Air Transport Association said in its latest industry financial outlook that net profit margins are set to plunge to negative 20 percent in 2020 with revenues plummeting by 50 percent to $419 billion.
Under IATA’s scenario, industry losses will moderate in 2021 as airlines stage something of a recovery. Losses will lessen to around $16 billion while revenues will rebound to nearly $600 billion, it predicted.
Reuters’ Laurence Frost wrote:
“Every day of this year will add $230 million to industry losses,” IATA Director General Alexandre de Juniac said.
The average loss amounts to almost $38 per passenger flown.
In 2021, IATA warned losses could hit $100 billion as traffic struggles to recover and airlines slash fares to win business.
“Airlines will still be financially fragile in 2021,” De Juniac said, predicting “even more intense” competition.
The BBC recalled:
IATA had previously warned that airlines would lose $314bn this year, after air traffic all but disappeared in April, when governments around the world imposed limits on travel to try to control the spread of the virus.
While there are signs travel is starting to pick up, the recovery has been slow, complicated by economic downturn and government quarantines.
In the US, the Transportation Security Administration screened more than 440,000 people at airport checkpoints on Sunday. That’s up from fewer than 100,000 people in April, but still down more than 80% from last year.