June 9 (UPI) — 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.
Passenger demand “evaporated” as the pandemic spread and international borders were closed, IATA said. in April, global air travel was roughly 95 percent below 2019 levels. By the end of the year, passenger numbers will have dropped by nearly 50 percent, approximately equaling 2006 levels.
“Financially, 2020 will go down as the worst year in the history of aviation,” said IATA Director General and CEO Alexandre de Juniac.
Based on an estimate of 2.2 billion passengers this year, airlines will lose $37.54 per passenger, he said, adding, “That’s why government financial relief was and remains crucial as airlines burn through cash.”
Dire as they are, the predictions are based on the assumption there is not a second and more damaging wave of COVID-19 infections to come, de Juniac cautioned.
He called for the universal implementation of social distancing and passenger safety guidelines adopted by the International Civil Aviation Organization as a key for restoring confidence among the flying public.
Those measures along with “effective contact tracing,” he said, “should give governments the confidence to open borders without quarantine measures.”