the International Air Transport Association (IATA) said on Tuesday that global airlines could report losses summing up to $118.5 billion this year as the aviation industry battle headwinds from the coronavirus pandemic and fast diminishing revenue from lower passenger traffic occasioned by lockdown.
The association forecasted $84.3 billion in net loss for 2020 in June, meaning the outlook for this year had deteriorated by 41 per cent or $34.2 billion within five months, data from the IATA website showed.
A net loss of $38.7 billion is anticipated next year, with the new revised outlook for 2021 worse than the June estimate of $15.8 billion by 145 per cent.
“African airlines have also received little government support and there have been a number of failures.
“The relative lack of cold chain facilities in the region may delay the distribution of vaccines and this region is expected to experience a delayed recovery in financial performance,” IATA said.
It envisaged that recovery would come at a swifter pace in the second half of 2021 unlike the period from January to June, when growth would be sluggish.
The group prescribed cost-cutting measures to boost demand, expressing optimism that COVID-19 vaccine or border reopening would transform the sector.
“This crisis is devastating and unrelenting. Airlines have cut costs by 45.8 per cent, but revenues are down 60.9 per cent.
“The result is that airlines will lose $66 for every passenger carried this year for a total net loss of $118.5bn. This loss will be reduced sharply by $80bn in 2021,” said Alexandre de Juniac, IATA’s director general and CEO.
“The prospect of losing $38.7bn next year is nothing to celebrate. We need to get borders safely re-opened without quarantine so that people will fly again. And with airlines expected to bleed cash at least until the fourth quarter of 2021 there is no time to lose.”
Passenger traffic is predicted to slump by 1.8 billion, 60.5 per cent weaker than that of 2019 and down to the level it was 17 years ago in 2003.
And passenger revenue is to dive to $191 billion, a third lower than the $612 billion reported in 2019.
The pandemic outbreak has cost the local airline industry $1 billion and the Nigerian economy $800 billion, said Musa Nuhu, director general of the Nigerian Civil Aviation Authority.