The global aviation industry suffering its worst downfall in history will lose more than $84 billion in 2020 alone. International Air Transport Association (IATA) earlier predicted that the spread of COVID-19 would wipe out millions of jobs across the world.
The turn of events after the pandemic spread has been unprecedented. The aviation industry, considered to be a workhorse for a nation’s economy is struck hard financially. The industry’s expansion plans to build new airports, new aircraft, expanding air routes all came to a halt. Since January 2020, when COVID-19 began to spread around the globe quickly, the airline industry was the first to be shut. Airlines grounded its fleet, limiting to just carrying repatriation flights. The financials of every airline are negative, putting to risk millions of jobs at risk. Many airlines already sacked pilots, cabin crew, and other staff due to nil demand.
IATA announced in its press report that in 2020 the airline industry’s revenues would halve. Compared to $850 billion in 2019, this year the forecast is a mere $420 billion. The analysis was concluded considering the airlines grounded most of its fleet for over two months. Airlines would also rake in losses up to $84 billion in 2020 alone. It also forecasted that in 2021, loses would reduce to $16 billion. Combined losses for 2020 and 2021 would be $100 billion as airlines restart operations. Airlines would start price wars eventually as the economies reopen, to carry more passengers and increase their market share.
“Financially, 2020 will go down as the worst year in the history of aviation. On average, every day of this year will add 230 million to industry losses. In total that’s a loss of 84.3 billion,” Alexandre de Juniac, IATA’s Director General and CEO.
IATA, which represents over 300 airlines and 82 per cent of global air traffic, also suggested airlines adhere to ICAO’s safety guidelines. This will help passengers travel safely, thereby help promote the aviation industry as the safest mode of transport.
Reopening of air services
Although various governments are announcing stimulus and bailout packages to the aviation industry, airlines are facing their worst financial difficulties. International borders in many parts of the world are yet to open not helping carriers like Emirates, Qatar Airways, Singapore Airlines, which solely depend on international passengers. Countries like India, China and the USA, which are the fastest-growing aviation markets in the world, have already opened up air services. Domestic flights carry a significant chunk of passengers in these countries considering their demographic.
Even in countries where the rate of spread of infection has reduced, passengers are still wary as governments are still thinking of reopening airports. The industry is however expected to bounce back to normal provided there is no second wave of the virus spreading across the world again.