The coronavirus pandemic will end up costing airlines $84 billion this year, the worst in the industry’s history according to an International Air Transport Association (IATA) forecast released on Tuesday.
IATA is the main trade group for most of the world’s airlines.
Between travel restrictions among countries across the world and reduced demand among apprehensive travelers, the airlines have needed government grants and loans to survive but the losses have been staggering.
“Every day of this year will add $230 million to industry losses,” IATA Director General Alexandre de Juniac said according to Reuters.
It could have been worse.
Cargo transport brought some relief as airlines delivered more goods than packages—cargo revenue has increased to a near-record $111 billion.
Reuters said IATA is taking into account the cost of weeks of lost business, a debt pile swollen by bailouts and a diminished demand outlook. The average loss amounts to almost $38 per passenger flown, and the troubles will likely extend into next year.
In 2021, IATA forecast losses at $15.8 billion to take the two-year total to about $100 billion as traffic struggles to recover and airlines slash fares to win business.
“Airlines will still be financially fragile in 2021,” De Juniac said. “That will translate into strong incentives for travelers to take to the skies again.”
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