KUALA LUMPUR, June 10 — Airlines are expected to lose US$84.3 billion (RM360 billion) this year for a net profit margin of -20.1 per cent, while revenues will be halved to US$419 billion (RM1.8 trillion), according to the International Air Transport Association (IATA).
As for next year, the association said losses were expected to be reduced to US$15.8 billion (RM67.5 billion) with revenues rising to US$598 billion (RM2.6 trillion).
“Financially, 2020 will go down as the worst year in the history of aviation. On average, every day of this year will add US$230 million (RM982.3 million) to industry losses. In total that’s a loss of US$84.3 billion.
“It means that — based on an estimate of 2.2 billion passengers this year — airlines will lose US$37.54 (RM160.33) per passenger. That’s why government financial relief was and remains crucial as airlines burn through cash,” IATA director general and chief executive officer, Alexandre de Juniac, said in a statement.
All regions are projected to record losses this year, with Asia-Pacific posting the highest absolute net losses of US$29 billion.
He said the worst of the collapse in traffic was likely over unless there was no second and more damaging wave of Covid-19.
A key to the recovery, he said, was the universal implementation of the re-start measures agreed through the International Civil Aviation Organisation (ICAO) to keep passengers and crew safe.
De Juniac said effective contact tracing should also give governments the confidence to open borders without quarantine measures.
“That’s an important part of the economic recovery because about 10 per cent of the world’s Gross Domestic Product is from tourism and much of that depends on air travel. Getting people safely flying again will be a powerful economic boost,” he said.
However, he cautioned that the industry’s recovery was expected to be long and challenging due to debt levels, operational efficiencies, recession and confidence.
“People will want to fly again, provided they have confidence in their personal financial situation and the measures taken to keep travellers safe.
“There is no tried and true playbook for recovery from Covid-19 but the ICAO Takeoff re-start plan outlines globally harmonised. It is important that industry and governments follow it so that travellers will have the maximum reassurance about their safety,” he said.
— Bernama
