2020 may go down as the worst year for the global aviation industry, according to data from the United Nations. Not only did global airlines collectively lose $370 billion, but passenger traffic dropped by 60 percent – a sharper drop than the 9/11 terrorist attack, the SARS outbreak and the 2008 financial crisis.
While the COVID-19 pandemic has taken an unmeasurable human toll around the world, data from the United Nations’ International Civil Aviation Organization (ICAO) gives us a clear picture of what it cost the global industry. In new analysis, the group estimates the outbreak cost airlines over $370 billion in passenger revenues.
International Traffic Hurt Most, With Uncertain Recovery Ahead
Across all operations, of 2.6 billion fewer passengers traveled by air during 2020, forcing airlines to cut their capacity by 50 percent. The drop makes the novel Coronavirus outbreak the worst crisis to affect the aviation industry – worse than the fallout from the 9/11 terrorist attacks, the SARS outbreak and the 2008 financial crisis.
International passenger traffic was affected the most, due to a patchwork of restrictions affecting the United States and other nations around the world. Airlines cut 66 percent of seat availability compared to 2019, resulting in a loss of $250 billion of gross operating revenues. Domestic-market airline traffic was also affected, but not as much. Overall, airlines cut just over one-third of their capacity as a result of the pandemic, resulting in a loss of $120 billion.
Around the world, the United States was not the worst affected area. In the Asia-Pacific region, where the virus was first detected, passenger traffic reduced by 916 million flyers, resulting in a 45 percent capacity drop and a loss of $120 billion. Across Europe, airlines cut their capacity by 58 percent, with 770 million fewer flyers boarding aircraft resulting in a loss of $100 billion. North American airlines reduced their capacity by only 43 percent, with a total drop of 596 million passengers carried aboard airlines. In total, carriers based in the U.S. and Canada lost $88 billion.
Looking forward to 2021 and beyond, ICAO is projecting four different scenarios, based on the duration and continued infection rate of the novel Coronavirus, local containment measures and consumer confidence in the aviation industry. In the best-case scenario, travelers are expected to embrace flying again, with passenger numbers and seat availability growing by over 20 percent compared to current numbers. In the worst option, travel will remain stagnant with passenger growth only increasing by around five percent.
The aviation industry recovery will equally depend on how international economies manage their own rebuilding. Questions around what shape the COVID-19 recession will take include how long the pandemic continues, how fast the public will embrace air travel again and how long airlines can weather the storm.
Airlines Rolling Out All Options to Encourage Flyers to Come Back
As vaccination campaigns continue, airlines are doing everything they can to ensure safe travel and encourage flyers to once again take to the skies. While Emirates and Etihad Airways have signed on to be the launch customers of the IATA travel pass, United Airlines and others conducted studies suggesting airline cabins may not promote the spread of COVID-19 if face masks and HEPA air filters are used. Other airlines, like Aer Lingus, are extending their flight change and cancellation waivers into the summer months.
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