August 4, 2021

IATA Forecast net airline industry losses to contain to $47.7B in 2021

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The International Air Transport Association (IATA) expects net airline industry losses to be contained to $47.7 billion in 2021 with a negative net profit margin of 10.4%

This was an improvement on the estimated net industry loss of $126.4 billion i with a negative net profit margin of 33.9% in 2020.

However, IATA, Director-General remarked that airlines are set to burn $81 billion of cash this year, despite an estimated 2.4 billion people traveling by air in the year.

“This crisis is longer and deeper than anyone could have expected. Losses will be reduced from 2020, but the pain of the crisis increases. There is optimism in domestic markets where aviation’s hallmark resilience is demonstrated by rebounds in markets without internal travel restrictions. Government imposed travel restrictions, however, continue to dampen the strong underlying demand for international travel,” he said.

There are significant differentiation is emerging between regions with large domestic markets and those relying primarily on international traffic.

Losses are highest in Europe (-$22.2 billion) with only 11% of its passenger traffic (RPK) being domestic. Proportionately, losses are much smaller in North America (-$5.0 billion) and Asia-Pacific (-$10.5 billion) where domestic markets are larger (66% and 45% respectively, pre-crisis).

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