The International Air Transport Association (IATA) expects net airline industry losses of US$47.7-billion in 2021. And, while this is an improvement on the $126.4-billion lost in 2020, the situation remains dire.
“This crisis is longer and deeper than anyone could have expected. Losses will be reduced from 2020, but the pain of the crisis increases,” said Willie Walsh, IATA’s Director General and formerly the boss of British Airways and Aer Lingus.
“There is optimism in domestic markets where aviation’s hallmark resilience is demonstrated by rebounds in markets without internal travel restrictions.”
But he noted that government-imposed travel restrictions continue to dampen the strong underlying demand for international travel.
Airlines to burn through another US$81-billion
Despite an estimated 2.4-billion people travelling by air in 2021, airlines will burn through a further US$81-billion of cash, IATA estimates.
In the Asia-Pacific region, which includes Australia, 2021 demand vs pre-pandemic demand is expected to be down by almost 58 percent.
This is slightly worse than the global average of 57 percent. But it is markedly better than Europe, for example, where demand is down by 66 percent.
IATA believes the outlook points to the start of industry recovery in the latter part of 2021. In the meantime, and in the face of the ongoing crisis, the organisation is calling for governments to have plans in place so that no time is lost in restarting the sector when the epidemiological situation allows for a re-opening of borders.
“Most governments have not yet provided clear indications of the benchmarks that they will use to safely give people back their travel freedom,” Walsh said.
Huge number of jobs in sector are still at risk
“In the meantime, a significant portion of the US$3.5-trillion in GDP and 88-million jobs supported by aviation are at risk.
“Effectively restarting aviation will energise the travel and tourism sectors and the wider economy. With the virus becoming endemic, learning to safely live, work and travel with it is critical.
“That means governments must turn their focus to risk management to protect livelihoods as well as lives.”
IATA also believes that, while the industry will recover, more government relief measures, particularly in the form of employment support programmes, will still be needed this year.
“There is a definite role for governments in providing relief measures that ensure critical employees and skills are retained to successfully restart and rebuild the industry,” said Walsh.