An updated IATA analysis has projected that aviation industry passenger revenues could plummet by $252 billion -- or 44% below 2019’s figure -- as a result of COVID-19-induced travel restrictions and an expected global recession. 

The latest analysis reflects a scenario in which severe travel restrictions last for up to three months, followed by a gradual economic recovery later this year.

IATA’s previous analysis of up to a $113 billion revenue loss was made on 5 March, before the countries around the world introduced sweeping travel restrictions that largely shut down the international air travel market.

 IATA Director General and CEO Alexandre de Juniac pointed out that the worst-case scenario predicted just a few weeks ago had worsened quickly. "The airline industry faces its gravest crisis," he said. “Without immediate government relief measures, there will not be an industry left standing. Airlines need $200 billion in liquidity support simply to make it through. Some governments have already stepped forward, but many more need to follow suit.

Envisioning that severe restrictions on travel are lifted after three months, this latest scenario suggests that the recovery in travel demand later this year is weakened by the impact of global recession on jobs and confidence. Full-year passenger demand, or revenue passenger kilometers (RPKs) declines 38% compared to 2019. Industry capacity, or available seat kilometre (ASKs) in domestic and international markets declines by 65% during the second quarter ended 30 June compared to a year-ago period but recovers to a 10% decline in the fourth quarter under this scenario.

By region of airline registration, the estimated impact on passenger revenues between 2020 and 2019 would be: Africa, -$4 billion; Asia Pacific, -$88 billion; Europe, -$76 billion, Latin American, -$15 billion; Middle East, -$19 billion; North America, -$50 billion. 

Image credit | iStock
 
Top