Iata projects 113 global losses for global airlines over coronavirus
According to a recent report by the International Air Transport Association (IATA), the global airline industry is expected to suffer a net loss of $113 billion in 2020 due to the COVID-19 pandemic.
The report, titled "IATA Economic Performance of the Airline Industry Report," highlights the devastating impact of the pandemic on the airline industry. The estimated loss is a significant increase from the initial forecast of $63 billion made in April 2020.
The main factors contributing to the projected loss include:
- Reduced demand: The pandemic has led to a significant decline in air travel demand, with passenger numbers expected to be down by 60% in 2020 compared to 2019.
- Reduced capacity: Airlines have reduced their capacity by 40% to match the reduced demand, which has resulted in higher costs per available seat.
- Increased costs: Airlines have had to absorb additional costs, such as those related to COVID-19 safety measures, crew training, and government-imposed restrictions.
- Reduced revenue: The pandemic has also led to a decline in ancillary revenue streams, such as baggage fees and food and beverage sales.
The report also highlights the significant impact of the pandemic on airline profitability, with the average net profit margin expected to be around -15% in 2020. This is a significant decline from the average net profit margin of 8% in 2019.
IATA has called on governments and industry stakeholders to work together to mitigate the impact of the pandemic on the airline industry. This includes providing financial support, relaxing travel restrictions, and implementing measures to reduce the spread of the virus.
The full report can be accessed on the IATA website.