Dubai - The global air industry is expected to lose 70 per cent of revenues for the whole year due to the severe travel restrictions imposed by government to contain the spread of COVID-19 pandemic, according to the International Air Transport Association (IATA) estimates.
The first quarter saw a decline of 38 percent of revenue opposed to the same period last year, IATA’s Director General and CEO, Alexandre and the organisation’s chief economist Brian Pearce said in an online briefing from their headquarters in Geneva.
IATA estimates that global airlines will lose $252 billion in passenger travel revenues for the whole year, 44 percent below 2019’s figures, Pearce said.
Earlier this month, IATA estimated the revenue loss to be around $113 billion. Since then more countries imposed more travel and air transport restriction that largely eliminated the international air travel market. The updated IATA estimates is based on the assumption that the lockdown and travel restrictions would last for three months.
Pearce said the air travel recovery would be slow because of the global recession caused by the coronavirus pandemic. “We don’t expect the industry to be back where it was as the economic forecast suggest at the moment we are already in deep economic recession. The expectation is that the central bank’s stimulus packages will produce a strong economic upturn [in the travel industry] at some point but not before the fourth quarter at the earliest or [most probably] in 2021. For the airline industry we might not last that long,” he warned.
The cargo service is the only part of the industry that is still operational as it is used to transport medical supplies and vital aid between regions, IATA officials said. However, financially this will not have a positive impact on the industry as cargo’s revenue represent only 10 per cent of the global airlines revenues, Pearce pointed out.
“Without immediate government relief measures, there will not be an industry left standing. Airlines need $200 billion in liquidity support simply to make it through. Some governments have already stepped forward, but many more need to follow suit,” de Juniac said.