Airlines made a net loss of $71.71 per passenger during 2020, according to global data released by IATA on 3 August, as the Covid-19 pandemic reversed a period of relatively strong financial performance.

In its latest World Air Transport Statistics report, the airline body contrasts last year’s fortunes with an average net profit of nearly $8 per passenger in the five years leading up to 2020, in what it acknowledges is a “high-volume, low-margin” business at the best of times.

“This highlights the financial challenges in the years ahead for airlines, when scaling operations up and repaying costly debt,” says IATA, which currently expects the industry to record a net loss of $47.4 billion in 2021.

The loss per passenger in 2020 corresponds to an overall industry net loss of $126.4 billion for the year. During 2020, IATA’s forecast for the overall loss was adjusted upwards several times as the year progressed and prospects for a meaningful recovery diminished. In June 2020, for example, it projected a net loss of $84 billion for the full year, while in November it forecast a loss of $118 billion.

Going into 2020, it had projected an industry net profit of $29.3 billion, which would have been an improvement on the $25.9 billion profit recorded in 2019.

Split by region, Asia-Pacific registered the smallest loss per passenger in 2020, at $39.54, as domestic markets proved resilient to the crisis, closely followed by carriers in Africa with a loss of $41.33 per traveller.

Figures were significantly worse for other regions, at $66.35 in North America and $66.67 in Europe. The Middle East net loss was $73.19 per passenger, while carriers in Latin America faced the highest loss at $89.45.

Lufthansa parked aircraft

Source: Lufthansa

Airlines in Europe were hit by particularly steep falls in revenue

Operating margins were similarly bleak, IATA data shows, with an industry-wide figure of -28.2% in 2020 – a sharp reversal of the positive trend leading up to the crisis, when the average margin was around 7%.

An operating margin of -30% in North America reflected carriers cutting costs “significantly less” than those in other regions, IATA says, although their revenues were higher than the industry trend.

Carriers in Asia-Pacific were also slow to cut costs, the airline body states, leading to an operating margin of -26.8%.

That was better than the margin seen in Europe of -30.4%, as the region was hit by a steeper fall in revenue than that seen elsewhere.

The Middle East and Africa did better when it came to operating margins for the year, at -18.7% and -19.3% respectively, while Latin America trailed the pack at -32.6%, amid a steeper fall in revenues compared with most regions.