2020 is Worst Year for the Aviation Industry Thanks to COVID-19
IATA has recently admitted that 2020 is the worst year for the aviation industry
We were all aware of the fact that the current coronavirus crisis had impacted the aviation industry badly. But we were not aware of how much losses the industry has faced till now. The CEO of IATA has recently admitted that 2020 is the worst year for the aviation industry, thanks to COVID-19.
To be precise, the CEO of the International Air Transport Association, Alexandre de Juniac said 2020 is “the industry’s worst financial year, bar none.” The numbers speak a lot. As per an estimate, the aviation industry will lose USD 157 (or AUD 213) billion in 2020 and 2021. This figure is five times more than the money lost during the 2008 crisis. The airlines have also lost USD 66 (or AUD 89) for each passenger that was carried this year. Even if the airlines cut the costs by 46% (which is 1 billion a day), they will still lose 60% of the revenue thanks to COVID-19.
The worst thing is that there are no signs of recovery in sight. The aviation industry will not return to pre-COVID-19 levels till 2024. By that time, the losses would be so huge that even IATA might not be able to predict the overall loss.
Even though the holiday season is around the corner and 1,070,900 people passed the TSA checkpoints the day before Thanksgiving this year, this number is still not large enough. It is 40% less than the number of people who flew before Thanksgiving in 2019.
The only bright spot for the aviation industry in times of COVID-19 is the fact that carrying freight has increased. The cargo revenues are expected to increase by 15% from 2019 levels, as per IATA. As 50% of cargo is moved via passenger aircraft, the prices of cargo increased when there was a steep decline in the number of planes flying internationally.
Talking about this bright spot at a time when COVID-19 is not going away, de Juniac said cargo had helped the airlines to “sustain their skeleton international networks.”
We hope the COVID vaccine will help the aviation and other hard-hit industries by making it safe to open international borders. Everyone from IATA CEO to a Qantas employee is probably looking forward to the day when the world will finally be COVID-19 free!
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