IATA has deepened its forecast for airline net losses in 2021 to $47.7 billion due to the slower than hoped for recovery in air travel from the pandemic.
The airline association had in late November projected industry losses of $38 billion for this year. That outlook was based on a pick-up in air travel during the second quarter.
But the slower than expected pace of recovery in air travel has prompted IATA to lower its traffic projections for this year, as measured in RPKs, from reaching 51% of 2019 levels to only 43%.
That in turn means IATA, in a fresh outlook issued today, now expects industry losses of $47.7 billion this year. It also deepened its estimate of the losses airlines made in 2020 from $118 billion to $126.4 billion.
IATA has pushed back it projections of when the industry will reach a cash positive position from the fourth quarter of 2021 into next year.
IATA chief economist Brian Pearce says: ”We think we are going to have to wait until 2022 for the industry to return to profitability.
”Next year and the year after actually looks much better,” he adds, citing the strength of the wider economy and outlook for travel in some key domestic markets showing pent-up demand exists once travel restrictions are lifted.
”It’s entirely the travel restrictions that is driving this [reduced travel]. The broader economy is looking more supportive,” says Pearce.