The International Air Transport Association (IATA) has released its financial outlook for the global air transport industry showing that "airlines are expected to lose $84.3 billion in 2020 for a net profit margin of -20.1 per cent".
According to IATA, revenues will fall 50 per cent to $419 billion from $838 billion in 2019. In 2021, losses are expected to be cut to $15.8 billion as revenues rise to $598 billion.
"Financially, 2020 will go down as the worst year in the history of aviation. On average, every day of this year will add $230 million to industry losses. In total that's a loss of $84.3 billion," Alexandre de Juniac, IATA's Director General and CEO were quoted as saying.
"It means that-- based on an estimate of 2.2 billion passengers this year--airlines will lose $37.54 per passenger. That's why government financial relief was and remains crucial as airlines burn through cash," he added.
He said that a key to the recovery is universal implementation of the re-start measures agreed through the International Civil Aviation Organization (ICAO) to keep passengers and crew safe. "And, with the help of effective contact tracing, these measures should give governments the confidence to open borders without quarantine measures."
Several countries across the globe put severe restrictions on movement in a bid to curb the spread of coronavirus.
He warned that airlines will "still be financially fragile in 2021". "Passenger revenues will be more than one-third smaller than in 2019. And airlines are expected to lose about $5 for every passenger carried. The cut in losses will come from re-opened borders leading to increased volumes of travellers," said Juniac.