Airline industry headed for US$84 billion net loss in 2020: IATA

An aerial view shows American Airlines, Southwest Airlines and United Airlines jets parked at McCarran International Airport amid the spread of the coronavirus. (Photo: Ethan Miller/Getty Images via AFP)

"Financially, 2020 will go down as the worst year in the history of aviation," said IATA director general Alexandre de Juniac at a news conference.

"After US$84 billion net losses this year, we forecast supplementary losses of US$15 billion in 2021," he added, revealing the extent to which its 290 member carriers have been affected by COVID-19 and the ensuing global lockdown designed to limit its spread.

"By comparison, airlines lost US$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."

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, IATA said in an updated forecast.

De Juniac said 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 restart 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 reopen borders without quarantine measures" as "if quarantine is introduced economies are effectively kept in lockdown for the purposes of travel”.

But De Juniac warned of a growing debt burden as despite government relief measures that had grown by US$120 billion to US$550 billion - equivalent to about 92 per cent of expected 2021 revenues.

IATA warned in April that airlines faced an "apocalypse" without state aid and forecast that revenues would fall by about 55 per cent amid the sharpest falloff in passenger demand since the 9/11 attacks in the United States in 2001.

De Juniac said he hopes to see a more orderly resumption of service than on that occasion "when everybody essentially did their own thing and we have spent 20 years sorting out the differences."