Airline losses seen to worsen

MANILA, Philippines — Estimated revenue losses of airlines this year are expected to worsen as the coronavirus disease 2019 or COVID-19 pandemic takes a deeper toll on the industry.

In its updated analysis of the revenue impact of the pandemic on the global air transport industry, the International Air Transport Association (IATA) said airline passenger revenues may drop by $314 billion this year, a 55 percent decline from 2019.

IATA said the updated figures reflect a significant deepening of the crisis since its March analysis.

“The industry’s outlook grows darker by the day. The scale of the crisis makes a sharp V-shaped recovery unlikely. Realistically, it will be a U-shaped recovery with domestic travel coming back faster than the international market. We could see more than half of passenger revenues disappear. That would be a $314 billion hit,” IATA director general and CEO Alexandre de Juniac said.

IATA said full-year passenger demand for both domestic and international is also expected to drop by 48 percent this year compared to 2019.

Driving the decline are overall economic developments as the world is heading for recession and travel restrictions which will deepen the impact of recession on demand for travel.

“Several governments have stepped up with new or expanded financial relief measures but the  situation remains critical. Airlines could burn through $61 billion of cash reserves in the second quarter alone. That puts at risk 25 million jobs dependent on aviation. And without urgent relief, many airlines will not survive to lead the economic recovery,” de Juniac said.

For the Philippines, IATA earlier said passenger demand could be reduced by 36 percent this year, resulting in a revenue loss of $3.51 billion for carriers and some 419,800 in job losses.