IATA "Airline Revenue Down 50% This Year... Losses Reach 100 Trillion Won"

The departure hall of Terminal 1 at Incheon International Airport is quiet on the 29th, ahead of the golden holiday weekend. Photo by Moon Honam munonam@

[Asia Economy Reporter Yu Je-hoon] This year, due to the novel coronavirus infection (COVID-19) crisis, the global airline industry's revenue is expected to decrease by 50% compared to the previous year, with losses reaching approximately 100 trillion won. Although a slight recovery is expected next year, losses amounting to around 20 trillion won are inevitable, indicating that the COVID-19-induced 'march of hardship' in the aviation industry will likely continue in the mid to long term.

According to the International Air Transport Association (IATA) on the 10th, the annual revenue of global airlines this year is predicted to fall to $419 billion (about 503 trillion won), a 50% decrease from the previous year. The operating net profit margin is expected to plummet to -20.1%, with total losses estimated at $84.3 billion (about 101 trillion won) this year. This is due to the worldwide suspension of flights caused by COVID-19.

Passenger demand is forecasted to drop 54.7% to 2.25 billion, a level similar to that of 14 years ago in 2006. Accordingly, revenue from the passenger sector is expected to be $24.1 billion (about 29 trillion won), roughly one-third of last year's $61.2 billion.

However, the cargo sector is predicted to partially offset these operational difficulties in the aviation industry. Although total cargo volume will decrease by 10.3 million tons to 51 million tons, the reduction in belly cargo supply from passenger flights is expected to lead to an annual fare increase of about 30%. As a result, cargo revenue is projected to slightly increase to $110.8 billion (about 133 trillion won) compared to the previous year, with its share more than doubling to 26%.

IATA forecasts that while some demand recovery will occur next year, overall challenges will persist. Global airline revenue is expected to rise to $598 billion, and losses are predicted to slightly decrease to $15.8 billion.

Alexandre de Juniac, Secretary General of IATA, stated, "This year, an average daily loss of $230 million (about 270 billion won) and a loss of $37.54 (about 45,000 won) per passenger are expected," adding, "2020 will be recorded as the worst year in the history of the aviation industry."

This content was produced with the assistance of AI translation services.