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Passenger business is the hardest-hit by the crisis since the number of passengers is forecasted to drop by 60.5 percent compared to 2019, which means that there will be 1.8 fewer people traveling in airplanes.
The International Air Transport Association (IATA) warned on Tuesday that Air passenger traffic is not expected to return to 2019 levels until 2024 at the earliest because of the devastating impact that the COVID-19 pandemic is having on the industry.
IATA's latest report indicates that in 2020 there will be net losses of $118.5 billion and $38.7 billion in 2021. This as airlines were forced to cut costs by $365 billion this year as the industry reached a standstill.
“This crisis is devastating and unrelenting. Airlines have cut costs by 45.8%, but revenues are down 60.9%. The result is that airlines will lose $66 for every passenger carried this year for a total net loss of $118.5 billion," IATA's Director General Alexandre de Juniac explained.
Deep industry losses will continue into 2021, even though performance is expected to improve over the period of the forecast. #IATAAGM#aviation
The organization said that “the history books will record 2020 as the industry’s worst financial year," as all the most significant parameters regarding air transport are negative. The passenger business is the hardest-hit by the crisis since the number of passengers is forecasted to drop by 60.5 percent compared to 2019, which means that there will be 1.8 fewer people traveling in airplanes.
Nonetheless, IATA highlights that unlike passenger business, cargo parameters have a more optimistic outlook, although it is still below 2019 levels except for cargo revenue. This branch "is bucking the trend, increasing to $117.7 billion in 2020 from $102.4 billion in 2019," the report noticed.
Looking forward, the organization considers that domestic services will recover faster than international markets. However, to survive, airlines will need more of the financial support they are currently receiving from governments.