MIAMI – Today, the International Air Transport Association (IATA) updated its March 5 report on the revenue impact of the COVID-19 and now forecasts a drop of US$252bn.

Previously, IATA expected a US$113bn revenue loss, but the gravity of the pandemic crisis has worsened due to government travel restrictions implemented in the last 18 days along with airlines and aerospace corporations cutting operations and requesting liquidity measures.

2019-2020 figure comparison

Compared to 2019’s figure, a US$252bn loss in 2020 mean a 44% difference, considering the numbers per region as previously forecasted at the beginning of March.

REGIONImpact on RPKs (December forecasted for 2020) on March 5Impact on RPKs (2020 vs. 2019) on March 24Estimated impact on passenger revenue (December forecasted for 2020) on March 5 Estimated impact on passenger revenue (2020 vs. 2019) on March 24
Africa-0.4%-32% -US$0.04bn -US$4bn
Asia Pacific-13.0%-37% -US$27.8bn -US$88bn
Latin America -0.1%-41%-US$0.03bn-US$15bn
Middle East -0.2%-39%-US$0.01bn-US$19bn
North America -0.4%-27%-US$0.07bn-US$50bn

A slow recovery on the way

IATA expects a low recovery phase regarding the global recession on jobs and confidence as it estimates travel restrictions to be in effect for the next three months.

Full-year passenger demand (RPKs) declines 38% in comparison with 2019 while industry capacity (ASKs) in domestic and international markets went down 65%.

IATA’s Director General and CEO, Alexandre de Juniac stated last week that worldwide airlines needed US$200bn in immediate governmental liquidity support to survive to the COVID-19 crisis while thanking the efforts already taken by governments in relation to their support.

“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. But without immediate government relief measures, there will not be an industry left standing,” added de Juniac.

As a result, several airlines have waived to 2020 guidance with their CEOs giving up to their common salaries and have also taken cost-saving measures related to unpaid leaves, credit facilities, and grounding and delaying of aircraft.

Aerospace companies such as Airbus and Boeing have taken liquidity measures as have too reduced operations, closed sites, supported customer performance and established home working measures for their staff.