The International Air Transport Association (IATA) has released revised figures showing that the COVID-19 crisis will see airline passenger revenues drop by $314 billion in 2020, a 55 per cent decline compared with 2019.
On 24 March, IATA estimated $252 billion in lost revenues (down 44 per cent versus 2019) in a scenario with severe travel restrictions lasting three months.
The updated figures reflect a significant deepening of the crisis since then, and reflect the following:
- Severe domestic restrictions lasting at least three months in many countries;
- Some restrictions on international travel extending beyond the initial three months; and
- Global impact, reassessed to now include significant effects to the African and Latin American markets.
Passenger demand across 2020 (both domestic and international) is expected to fall by 48 per cent year-on-year. The IATA report cites:
- The likelihood of a global recession; and
- The effect of travel restrictions, which the IATA said will be most severe across April.
“The industry’s outlook grows darker by the day,” said IATA chief Alexandre de Juniac. “The scale of the crisis makes a sharp V-shaped recovery unlikely. Realistically, it will be a U-shaped recovery with domestic travel coming back faster than the international market. We could see more than half of passenger revenues disappear.
This is the largest crisis to ever hit #aviation.
Worldwide flights were a massive 70% lower at the start of Q2 and further declines are likely. #COVIDー19
? https://t.co/E783WpnRDb pic.twitter.com/LAvwhwyGYq
— IATA (@IATA) April 9, 2020
“That would be a $314 billion hit. Several governments have stepped up with new or expanded financial relief measures but the situation remains critical. Airlines could burn through $61 billion of cash reserves in the second quarter alone.
“That puts at risk 25 million jobs dependent on aviation. And without urgent relief, many airlines will not survive to lead the economic recovery.”
De Juniac also strongly advocated for government funding to airlines in the report.
“Governments must include aviation in stabilisation packages. Airlines are at the core of a value chain that supports some 65.5 million jobs worldwide. Each of the 2.7 million airline jobs supports 24 more jobs in the economy,” he said.
“Financial relief for airlines today should be a critical policy measure for governments. Supporting airlines will keep vital supply chains working through the crisis,” he said. “If airlines are not ready, the economic pain of COVID-19 will be unnecessarily prolonged.”
