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"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," said Alexandre de Juniac, director general and CEO, IATA.
Even as the number of coronavirus cases continue to rise globally, various countries have restarted domestic and international air travel, albeit with much precaution and in a curtailed manner.
In 2021, IATA warned losses could hit $100 billion as traffic struggles to recover and airlines slash fares to win business. "Airlines will still be financially fragile in 2021," Mr De Juniac said, predicting "even more intense" competition.
According to IATA's estimates, 2.2 billion passengers will travel through flights this year and the airlines will lose $37.54 per passenger, said Mr De Juniac.
The industry body found that costs are not falling as fast as demand. Total expenses of $517 billion are 34.9 per cent below 2019 levels; however, revenues are expected to drop 50 per cent.
"Non-fuel unit costs will rise sharply by 14.1 per cent, as fixed costs are spread over fewer passengers. Lower utilization of aircraft and seats as a result of restrictions will also add to rising costs," said IATA.
Fuel prices offer some relief. The jet fuel forecast average for 2020 is $36.8 per barrel, as against $77 per barrel in 2019. Fuel is expected to account for 15 per cent of overall costs in 2020 (compared to 23.7 per cent in 2019), according to IATA.
While all regions are expected to suffer losses in 2020, passenger demand in the Asia Pacific is expected to slump 53.8 per cent, with a $29.0 billion hit in net profit.
India resumed its scheduled domestic passenger flights on May 25 after a gap of two months. Scheduled international passenger flights continue to remain suspended in the country.
Even in markets where COVID-19 infection rates have fallen sharply, airlines still face a patchwork of travel restrictions and wary consumers. A 14-day quarantine for arriving passengers introduced by Britain this week has prompted an angry response and legal threats from the travel industry amid reports that it may be loosened in favour of "air corridors" to some destinations.