Sunday, January 17, 2021

After disastrous 2020, is aviation industry finally getting its wings in 2021?

The International Air Transport Association (IATA) released its financial outlook for the global air transport industry, showing that airlines were expected to lose $84.3 billion in 2020 for a net profit margin of -20.1%. Revenues would fall 50% to $419 billion from $838 billion in 2019. In 2021, losses are expected to be cut to $15.8 billion as revenues rise to $598 billion.

“Financially, 2020 will go down as the worst year in the history of aviation. On an average, every day of this year will add $230 million to industry losses. In total, that’s a loss of $84.3 billion. It means that—based on an estimate of 2.2 billion passengers in 2020—airlines would lose $37.54 per passenger. That’s why government financial relief was and remains crucial as airlines burn through cash,” said Alexandre de Juniac, IATA’s director general and CEO.

There is no doubt that the year 2020 will go down in history books as the air transport industry’s most turbulent year till date, with massive fluxes in passenger volumes globally due to the pandemic. Government-imposed travel bans and nationwide lockdowns during the first half of the year were not enough to prompt travellers to return to the skies when things eased. After showing some positive signs over the northern hemisphere in the summer months, global passenger traffic at the end of November 2020 slumped back to 48% year-on-year (YoY) from 2019, according to data shared by SITA, the IT provider for air transport industry, delivering solutions for airlines, airports, aircraft and government data. Regaining passenger confidence has become a critical factor for airlines to weather the ongoing economic storm.

David Lavorel, CEO of SITA, at airports and borders, predicts a smarter, safer and more sustainable travel industry fit for the people and planet. He says, “Despite the bleak travel outlook for the 2020 holiday season in western countries, there are reasons to be hopeful for 2021. Fringe and emerging technologies that were sidelined during the previous decade of industry growth are now being examined with fervent scrutiny to evaluate their efficacy in solving crucial Covid-19 challenges.” For example, Health ETAs (Electronic Travel Authority), where electronic verification of a passenger’s health status is required upon entry to a country, look set to be commonplace by 2022. Their usage will become standardised as new vaccines are made available in 2021.

17/01/21 Vaishali Dar/Financial Express

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