Owing to the severity of travel restrictions and the expected global recession, IATA now estimates that industry passenger revenues could plummet 252 billion dollars or 44 per cent below 2019’s figure.(Unsplash)
The International Air Transport Association (IATA) has updated its analysis of the revenue impact of the COVID-19 pandemic on the global air transport industry.
Owing to the severity of travel restrictions and the expected global recession, IATA now estimates that industry passenger revenues could plummet 252 billion dollars or 44 per cent below 2019’s figure.
This is in a scenario in which severe travel restrictions last for up to three months followed by a gradual economic recovery later this year.
IATA’s previous analysis of up to a 113 billion dollar revenue loss was made on March 5 before the countries around the world introduced sweeping travel restrictions that largely eliminated the international air travel market.
“The airline industry faces its gravest crisis. Within a matter of a few weeks, our previous worst-case scenario is looking better than our latest estimates,” said IATA’s Director General and CEO Alexandre de Juniac.
“But without immediate government relief measures, there will not be an industry left standing. Airlines need 200 billion dollars in liquidity support simply to make it through,” he said in a statement.
Some governments have already stepped forward, but many more need to follow suit, said de Juniac.
The latest analysis envisions that under this scenario, severe restrictions on travel are lifted after three months. The recovery in travel demand later this year is weakened by the impact of the global recession on jobs and confidence.
Full-year passenger demand (revenue passenger kilometres or RPKs) declines 38 per cent compared to 2019.
Industry capacity (available seat kilometres or ASKs) in domestic and international markets declines 65 per cent during the second quarter ended June 30 compared to a year-ago period, but in this scenario recovers to a 10 per cent decline in the fourth quarter.
IATA represents some 290 airlines comprising 82 per cent of global air traffic.
(This story has been published from a wire agency feed without modifications to the text.)