<p>Global aviation body International Air Transport Association (IATA) has warned that the global airlines could lose an estimated $47.7 billion in 2021 due to Covid-19 (net profit margin of -10.4 per cent).</p>.<p>However, this is an improvement on the estimated net industry loss of $126.4 billion in 2020 (net profit margin of -33.9 per cent). International passenger traffic remained down 86.6 per cent on pre-crisis levels over the first two months of 2021.</p>.<p>Vaccination progress in developed countries, particularly the US and Europe is expected to combine with the widespread testing capacity to enable a return to some international travel at scale in the second half of the year, reaching 34 per cent of 2019 demand levels, the IATA said in a statement.</p>.<p>Travel restrictions, including quarantines, have killed demand. IATA estimates that travel (measured in revenue passenger kilometres or RPKs) will recover to 43 per cent of 2019 levels over the year. While that is a 26 per cent improvement on 2020, it is far from a recovery. Domestic markets will improve faster than international travel. Overall passenger numbers are expected to reach 2.4 billion in 2021. That is an improvement on the nearly 1.8 billion who travelled in 2020 but well below the 2019 peak of 4.5 billion, IATA said.</p>.<p>“This crisis is longer and deeper than anyone could have expected. Losses will be reduced from 2020, but the pain of the crisis increases. There is optimism in domestic markets where aviation’s hallmark resilience is demonstrated by rebounds in markets without internal travel restrictions,” said Willie Walsh, IATA's Director-General.</p>.<p>Government-imposed travel restrictions, however, continue to dampen the strong underlying demand for international travel. "Despite an estimated 2.4 billion people travelling by air in 2021, airlines will burn through a further $81 billion of cash," he said.</p>.<p>IATA continues to urge governments to have plans in place so that no time is lost in restarting the sector when the epidemiological situation allows for a re-opening of borders.</p>.<p>Industry losses of this scale imply a cash burn of $81 billion in 2021 on top of $149 billion in 2020. Government financial relief measures and capital markets have been filling this hole in airline balance sheets, preventing widespread bankruptcies. The industry will recover but more government relief measures, particularly in the form of employment support programmes, will be needed this year, the global body said.</p>.<p>“Owing to government relief measures, cost-cutting, and success in accessing capital markets, some airlines appear able to ride out the storm. Others are less well-cushioned and may need to raise more cash from banks or capital markets. This will add to the industry’s debt burden, which has ballooned by $220 billion to $651 billion. There is a definite role for governments in providing relief measures that ensure critical employees and skills are retained to successfully restart and rebuild the industry,” said Walsh.</p>.<p>Industry revenues are expected to total $458 billion. That’s just 55 per cent of the $838 billion generated in 2019 but represents 23 per cent growth on the $372 billion generated in 2020.</p>.<p>Passenger revenues are expected to total $231 billion, up from $189 billion in 2020, but far below the $607 billion generated in 2019.</p>.<p>Cargo revenues are expected to reach $152 billion, a historic high. This is up from $128 billion in 2020 and $101 billion in 2019. Capacity remains constrained owing to the large-scale grounding of the passenger fleet. This removed significant belly capacity, driving up yields 40 per cent in 2020, with a further 5 per cent growth expected in 2021. In 2021 cargo will account for a third of industry revenues. This is significantly above cargo’s historic contribution, which ranged around 10-15 per cent of total revenues. The improvement in cargo, however, is not able to offset the dramatic decline in passenger revenues.</p>
<p>Global aviation body International Air Transport Association (IATA) has warned that the global airlines could lose an estimated $47.7 billion in 2021 due to Covid-19 (net profit margin of -10.4 per cent).</p>.<p>However, this is an improvement on the estimated net industry loss of $126.4 billion in 2020 (net profit margin of -33.9 per cent). International passenger traffic remained down 86.6 per cent on pre-crisis levels over the first two months of 2021.</p>.<p>Vaccination progress in developed countries, particularly the US and Europe is expected to combine with the widespread testing capacity to enable a return to some international travel at scale in the second half of the year, reaching 34 per cent of 2019 demand levels, the IATA said in a statement.</p>.<p>Travel restrictions, including quarantines, have killed demand. IATA estimates that travel (measured in revenue passenger kilometres or RPKs) will recover to 43 per cent of 2019 levels over the year. While that is a 26 per cent improvement on 2020, it is far from a recovery. Domestic markets will improve faster than international travel. Overall passenger numbers are expected to reach 2.4 billion in 2021. That is an improvement on the nearly 1.8 billion who travelled in 2020 but well below the 2019 peak of 4.5 billion, IATA said.</p>.<p>“This crisis is longer and deeper than anyone could have expected. Losses will be reduced from 2020, but the pain of the crisis increases. There is optimism in domestic markets where aviation’s hallmark resilience is demonstrated by rebounds in markets without internal travel restrictions,” said Willie Walsh, IATA's Director-General.</p>.<p>Government-imposed travel restrictions, however, continue to dampen the strong underlying demand for international travel. "Despite an estimated 2.4 billion people travelling by air in 2021, airlines will burn through a further $81 billion of cash," he said.</p>.<p>IATA continues to urge governments to have plans in place so that no time is lost in restarting the sector when the epidemiological situation allows for a re-opening of borders.</p>.<p>Industry losses of this scale imply a cash burn of $81 billion in 2021 on top of $149 billion in 2020. Government financial relief measures and capital markets have been filling this hole in airline balance sheets, preventing widespread bankruptcies. The industry will recover but more government relief measures, particularly in the form of employment support programmes, will be needed this year, the global body said.</p>.<p>“Owing to government relief measures, cost-cutting, and success in accessing capital markets, some airlines appear able to ride out the storm. Others are less well-cushioned and may need to raise more cash from banks or capital markets. This will add to the industry’s debt burden, which has ballooned by $220 billion to $651 billion. There is a definite role for governments in providing relief measures that ensure critical employees and skills are retained to successfully restart and rebuild the industry,” said Walsh.</p>.<p>Industry revenues are expected to total $458 billion. That’s just 55 per cent of the $838 billion generated in 2019 but represents 23 per cent growth on the $372 billion generated in 2020.</p>.<p>Passenger revenues are expected to total $231 billion, up from $189 billion in 2020, but far below the $607 billion generated in 2019.</p>.<p>Cargo revenues are expected to reach $152 billion, a historic high. This is up from $128 billion in 2020 and $101 billion in 2019. Capacity remains constrained owing to the large-scale grounding of the passenger fleet. This removed significant belly capacity, driving up yields 40 per cent in 2020, with a further 5 per cent growth expected in 2021. In 2021 cargo will account for a third of industry revenues. This is significantly above cargo’s historic contribution, which ranged around 10-15 per cent of total revenues. The improvement in cargo, however, is not able to offset the dramatic decline in passenger revenues.</p>
