Coronavirus: Airlines Project $314bn Revenue Loss

The International Air Transport Association (IATA) has presented an audit report of the airline passenger revenues with a projected revenue loss of $314bn.

IATA disclosed this in an analysis on Tuesday, adding that the airlines would record a 55% decline in revenue as against the previous year.

Reviewing the report, On 24 March, IATA forecast $252bn in lost revenues in a scenario with severe travel restrictions lasting three months.

“The updated figures reflect a significant deepening of the crisis since then,” the association said.

“Passenger demand closely follows the GDP progression. The impact of reduced economic activity in Q2 alone would result in an eight per cent fall in passenger demand in the third quarter,” IATA said.

It explained that travel restrictions would deepen the impact of the recession on demand for travel while the most severe impact was expected to be in Q2.

Commenting on this,  the Director-General and Chief Executive Officer of IATA, Alexander de Juniac, said, “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 $314bn hit. Several governments have stepped up with new or expanded financial relief measures but the situation remains critical. Airlines could burn through $61bn of cash reserves in the second quarter alone. That puts at risk 25 million jobs dependent on aviation.”

He added that if no urgent relief measures were put in place in the aviation sector,  many airlines might not survive the impact of the coronavirus pandemic.