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Airline trade body predicts yet another tough year ahead despite govt support

By BO LEUNG in London | China Daily Global | Updated: 2020-11-27 09:36

An Air Canada Airbus A320-200 airplane prepares to land at Vancouver's international airport in Richmond, British Columbia, Canada, on Feb 5, 2019. [Photo/Agencies]

The novel coronavirus pandemic has crippled the aviation industry this year and it appears losses will continue well into the new year, according to trade body the International Air Transport Association, also known as IATA.

This year's net loss is on course to be $118.5 billion, worse than the $84.3 billion previously forecast, and IATA says there will be more losses in 2021, projecting a $38.7 billion deficit.

Alexandre de Juniac, the group's director general and CEO, described the situation as "devastating and unrelenting".

"We need to get borders safely reopened without quarantine so that people will fly again," he said. "And with airlines expected to bleed cash at least until the fourth quarter of 2021, there is no time to lose."

Passenger numbers for this year are expected to drop to 1.8 billion, from 4.5 billion in 2019, and IATA expects a bounce back to 2.8 billion in 2021.

Passenger revenues are expected to fall to $191 billion, less than one-third of the $612 billion earned in 2019.

"The history books will record 2020 as the industry's worst financial year, bar none," said de Juniac.

"Airlines cut expenses by an average of one billion dollars a day over 2020 and will still rack-up unprecedented losses. Were it not for the $173 billion in financial support by governments, we would have seen bankruptcies on a massive scale."

IATA called the road to recovery "long and difficult" and wants governments to re-open borders for travel by introducing the use of systematic COVID-19 testing, as an alternative to current quarantine rules.

"We have the ability to safely reopen travel with systematic testing," he said.

"We cannot wait on the promise of a vaccine. We are preparing for efficient vaccine distribution. But testing is the immediate solution to meaningfully re-open air travel.

"The livelihoods of millions are in the hands of governments and public health authorities. Governments understood the criticality of a viable air transport sector when they invested billions to keep it afloat. Now they need to protect those investments by giving airlines the means to safely do business."

It is thought that as many as 46 million jobs supported by air travel could be lost and that the economic activity sustained by aviation will be reduced by $1.8 trillion.

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