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#Covid19: IATA air transport analysis shows deeper revenue hit

The International Air Transport Association (IATA) has updated its analysis of the revenue impact of the Covid-19 pandemic on the global air transport industry. Owing to the severity of travel restrictions and the expected global recession, IATA now estimates that industry passenger revenues could plummet $252bn 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.
bilaleldaou via Pixabay

IATA’s previous analysis of up to a $113bn revenue loss was made on 5 March 2020, before the countries around the world introduced sweeping travel restrictions that largely eliminated the international air travel market.

"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 $200bn in liquidity support simply to make it through. Some governments have already stepped forward, but many more need to follow suit," said Alexandre de Juniac, IATA’s director general and CEO.

Slower recovery


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.

Region of Airline Registration% Change in RPKsEst. Impact on Pass. Revenue
Africa-32%-4
Asia-Pacific-37%-88
Europe-46%-76
Latin America-41%-15
Middle East-39%-19
North America-27%-50
Industry-38%-252

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.
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