International Air Transport Association (IATA) says the current COVID-19 pandemic will see the global air transport industry experiencing revenue dip of about US$252 billion or 44% below 2019’s figure.
According to IATA, the revenue dip will be a result of travel restricts that have been instituted by various countries in a bid to curb the spread of COVID-19.
“Owing to the severity of travel restrictions and the expected global recession, IATA now estimates that industry passenger revenues could plummet $252 billion or 44% below 2019’s figure.
“This is in a scenario in which severe travel restrictions last for up to three months, followed by a gradual economic recovery later this year,” said the association following an updated assessment of the revenue impact from COVID-19.
IATA’s director general and CEO, Alexandre de Juniac said the industry is facing the worst crisis and governments might need to intervene with liquidity support.
“The airline industry faces its gravest crisis. Within a matter of a few weeks, our previous worst-case scenario is looking better than our latest estimates.
“But 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,” he said.
Despite the current situation, IATA, however, envisions a slower recovery by the industry on conditions that strict travel restrictions are lifted after 3 months.
“The latest analysis envisions that under this scenario, severe restrictions on travel are lifted after 3 months. The recovery in travel demand later this year is weakened by the impact of the global recession on jobs and confidence.
“Full-year passenger demand (revenue passenger kilometres or RPKs) declines by 38% compared to 2019. Industry capacity (available seat kilometre or ASKs) in domestic and international markets declines 65% during the second quarter ended 30 June compared to a year-ago period, but in this scenario recovers to a 10% decline in the fourth quarter,” said the IATA.
