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Airlines will incur losses of more than $ 84 billion, due to the disruption of travel resulting from the outbreak of the Corona virus.
The International Air Transport Association, whose membership includes 290 airlines, announced that the sector’s profits will not exceed $ 419 billion, half of what it was in 2019.
These losses are more severe than initially expected, despite recent indications that travelers are returning to fly.
Etihad said that this year will be the worst year recorded in history, in terms of material losses in the field of aviation.
“There is no comparison,” said President of the Executive Union Alexander de Juniac.
The federation expected airlines to lose an average of $ 230 million a day this year, after the number of passengers decreased to 2.25 billion, nearly half of their number last year.
This decline will erase more than ten years of growth, bringing the sector back to its 2006 levels.
The federation expects the sector to see additional losses next year, but the damage will drop dramatically – to $ 15.8 billion – as revenue begins to rise and passenger numbers return to their levels in 2014.
“If we don’t see a second and more harmful wave of Covid 19, we think the worst crash in air traffic is behind us,” de Juniac said.
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Slow recovery
The International Air Transport Association previously warned that airlines would lose $ 314 billion this year, after air traffic stopped last April, as governments around the world imposed travel restrictions to contain the spread of the epidemic.
There are signs of a slight increase in travel, but the recovery appears slow and complicated, due to the economic downturn and quarantine measures imposed by governments.
In the United States, the Transportation Security Administration examined more than 440,000 passengers at airport terminals on Sunday, more than 100,000 over the past April, but it is about 80 percent less than last year.
Companies have responded to the crisis by halting their fleets, cutting services and cutting thousands of jobs. The International Air Transport Association said that companies may reduce their prices in the coming months to motivate travelers, which could worsen their financial situation.
Some airlines such as Flybe have already gone bankrupt, while others have received millions of emergency government aid.
De Juniac said that continued support is necessary: ”The government financial benefit will be critical with the airline’s huge cash losses.”
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