AFRICA – International Air Transport Association (IATA) has projected that African airlines will lose approximately US$3.7 billion between this year and 2021, with global losses projected to hit US$157 billion.
According to the aviation body, the bulk of African losses of about US$2 billion will be registered in 2020, and another US$1.7 billion next year.
IATA said that globally, the aviation industry will lose US$118.5 billion this year against an earlier projection of US$84.3 billion, with 2021 accounting for US$38.7 billion in losses.
The association had initially expected next year’s losses to level off at US$15.8 billion, but now blames the dampened prospects on the second wave of the coronavirus pandemic, which has stalled much-anticipated recovery in key markets.
Outgoing IATA Chief Executive Officer, Alexandre de Juniac says that although airlines have cut costs by 45.8%, revenues are still down 60.9%.
The result is that airlines will lose US$66 for every passenger carried this year for a total net loss of US$118.5 billion.
He argues that this loss will be reduced sharply by US$80 billion in 2021, with airlines expected to bleed cash at least until the fourth quarter of 2021.
Passenger numbers are forecast to increase to 2.8 billion in 2021, representing an improvement of a billion more travellers, although that will still be 1.7 billion travellers short of 2019 figures.
Even though 45% below 2019, revenues are expected to rebound to US$459 billion in 2021 while costs are expected to rise by $61 billion, resulting in improved financial performance.
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