Global carriers could face nearly $48 billion in losses this year as the troubled sector is struggling to rebound from the coronavirus pandemic, the International Air Transport Association (IATA) has said.
The new figures, presented by the global airlines body on Wednesday, are around 25% worse than it had previously expected. It had earlier forecast a $38 billion deficit.
The airline industry’s losses are expected to amount to around a third of what the troubled sector saw in 2020, when it lost more than $126.4 billion as the spread of the coronavirus forced governments to shut borders.
“This crisis is longer and deeper than anyone could have expected. Losses will be reduced from 2020, but the pain of the crisis increases,” IATA’s Director General Willie Walsh said in a statement.
He added that travel restrictions imposed by governments still affect the demand for international travel. The agency now expects global traffic in 2021 to amount to 43% of pre-crisis levels. According to the IATA, this marks an improvement compared to last year, but it is still “far from a recovery.”
“Industry losses of this scale imply a cash burn of $81 billion in 2021 on top of $149 billion in 2020,” the agency said, adding that government aid has prevented widespread bankruptcies in the industry that is responsible for millions of jobs globally.
On Monday, the US State Department announced its intention to expand the “Do Not Travel” advisory to about 80% of countries worldwide due to pandemic-related risks. Earlier this month, the UK government signaled that it is unsure whether non-essential international travel can resume on May 17 as was initially planned.
The IATA noted that the lack of progress on the reopening of the aviation sector affects the wider economy, putting a significant portion of the $3.5 trillion in GDP and 88 million jobs supported by aviation at risk.