MIAMI – Airline revenues are expected to remain 46% lower in 2021 than those pre-pandemic, when they topped US$830bn, an International Air Transport Association (IATA) report mentioned on October 27.
As stated in the report, quoted by the Singaporean portal The Straits Times, the “previous outlook for a smaller drop of 29 percent was based on expectations for a demand recovery commencing in the fourth quarter of 2020.”
For the year of 2020, however, IATA now estimates a 66-percent drop in traffic compared to 2019.
“The fourth quarter of 2020 will be extremely difficult and there is little indication the first half of 2021 will be significantly better, so long as borders remain closed and/or arrival quarantines remain in place,” IATA director general Alexandre de Juniac said in a statement quoted by the portal.
Regardless of Drastic Measures
Even with drastic measures aimed at cutting costs, Juniac still thinks airlines “will need further government aid to avoid running out of cash.”
IATA, per the report, “also urged airports and air traffic controllers not to increase their prices to cover shortfalls from the vastly lower traffic,” as well as the entity also “warned that relief for airlines this year on fuel costs thanks to low oil prices is expected to fade away in 2021.”
“Even if we maximize our cost-cutting, we still won’t have a financially sustainable industry in 2021,” de Juniac stated, warning that “1.3 million jobs were at risk in the aviation industry alone, with potential knock-on effects on millions more.”
Featured image: Airways