Global losses deepen for world's airlines, warns IATA

London (Quantum Commodity Intelligence) - The world's airlines could be facing combined losses of $47.7 billion this year, warned the International Air Transport Association (IATA) while revising down its forecast for passenger numbers amid the persistence of Covid-19.

In December, the trade body expected losses would total $38 billion this year.

But passenger numbers will recover more slowly than expected, and the distance travelled by flyers, known as revenue passenger kilometres (RPK), will still be 57% down in 2021 from 2019, worse than December's forecast of 50% below.

International passenger traffic will be the same this year as last year after a slow start.

After averaging just 24% of pre-crisis levels in 2020, international passenger traffic nosedived lower again at the start of the year, and it will only climb back to 34% of 2019 levels by the end of this year, leaving zero growth.

But the domestic flight market will bounce back to almost pre-crisis levels by the end of the year.

"This produces much better (relatively) financial performance for those airlines and regions with large domestic markets: 66% of N American airline RPKs are domestic, Latin America 48%, Asia Pacific 45% but for Europe only 11% and Middle East only 3%. Africa 14% (2019 shares)," noted IATA.

Fourth quarter losses were worse than expected, and global 2020 net losses are now expected to total $126.4 billion.

European airlines accounted for $35 billion of the losses in 2020 and will suffer another $22 billion loss this year.

There are bright spots, however, with the cargo air freight market soaring along with the recovery in trade.

Cargo revenues are forecast to rise to $152 billion, about one-third of the industry's revenues.

Before the crisis, cargo represented only 10-15% of the typical airline business.

IATA's membership accounts for 82% of global air traffic.