The International Air Transport Association (IATA) has projected that African airlines will lose $3.7 billion between this year and 2021, with global losses projected to hit $157 billion.
According to the association, the bulk of African losses ($2 billion) will be registered in 2020, and another $1.7 billion next year.
IATA also said globally, the industry will lose $118.5 billion this year against an earlier projections of $84.3 billion, with 2021 accounting for $38.7 billion in losses. The association had initially expected next year’s losses to level off at $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 $66 for every passenger carried this year for a total net loss of $118.5 billion. He argues that this loss will be reduced sharply by $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. Although 45% below 2019, revenues are expected to rebound to $459 billion in 2021 while costs are expected to rise by $61 billion, resulting in improved financial performance.