The International Air Transport Association (Iata) is forecasting what it calls a “tremendous revenue shock” for the aviation industry this year after it revealed a report about the impact of COVID-19 on the world.
It hosted a teleconference via Microsoft Teams on March 24 to share figures about the total estimated cost to the industry.
“We expect a 38% fall in global demand and a US$252 billion pax revenue loss in 2020,” said Brian Pearce, Iata Chief Economist.
Pearce also expects the industry to recover much later than widely expected. “When other pandemics occurred, the industry was able to rebound much sooner,” he said.
It is unlikely that the industry will recover in six months because the entire world will suffer the effects of a global recession as a result of various travel restrictions and bans put in place during the pandemic.
Iata does expect a strong 2021 recovery and this will be backed by government stimulus being put into place now. Interest rate cuts, loan payment deferrals, industry investment initiatives and social support are among the things that will have positive long-term impact.
In an appeal to government, the association estimates that the industry will require up to $200 billion in government relief measures to survive the current liquidity crisis. While some governments have stepped up with support, many more need to follow to prevent the collapse of the airline industry.