Airlines face another grim year with larger-than-expected losses as some regions struggle to speed up Covid-19 vaccination campaigns and control variants of the virus, an industry group said earlier this month.
The industry is expected to post net after-tax losses of $ 47.7 billion (€ 39.7 billion) in 2021, higher than the $ 38 billion forecast in December, according to the International Air Transport Association.
On a more positive note, IATA slightly upped its forecast for global passenger air traffic, saying it would hit 43% of pre-pandemic levels this year – down from around 33 to 38% forecast in February.
“Financial performance will be worse and more varied this year than we expected in our December forecast, due to difficulties in controlling variants of the virus and the slowdown in vaccination in some areas,” the association said. in a report.
IATA said it now expects “much more limited” flights during the key summer season, when people take to the air on vacation.
Airlines lost more than $ 126 billion last year as the Covid-19 crisis prompted countries to lock down cities, close borders and ban international flights.
IATA expects more passengers to fly in 2021, with 2.4 billion passengers compared to 1.8 billion in 2020.
It is still a long way from pre-pandemic air traffic: some 4.5 billion people traveled by air in 2019.
Europe worse than the United States
Image varies by region.
North American airlines will fare better than previously thought, with losses of $ 5 billion instead of $ 11 billion, thanks to the recovery of the domestic market there, the IATA.
But the outlook has deteriorated in Europe due to a slower vaccination campaign and less easing of restrictions on international travel.
European airlines are now expected to lose $ 22 billion, up from $ 12 billion in previous forecasts.
Meanwhile, passenger volume at European airports is only expected to return to pre-pandemic levels in 2025, a year later than expected, according to industry group ACI Europe.
IATA expects zero growth in international passenger travel this year, but better performance for airlines with large domestic markets such as North America, Latin America and Asia-Pacific, thanks to the absence of travel restrictions within the borders.
Airlines are expected to burn $ 81 billion in cash this year.
While the big airlines have raised enough cash to cover this, the smaller ones do not and will need government assistance or to raise more money from banks or financial markets, which increases the burden of the sector’s debt, IATA said.
“The prospects for international air travel are critically dependent on the rollout of vaccination,” the industry body said.
“In some countries it’s positive, but the pace of deployment is very slow in others, especially in developing economies.”