When a US$47.7 billion loss is an improvement, it’s not hard to imagine just how sorry the state of the global airline industry is. The good news, IATA says, is that the aforementioned expected net airline industry calamity for 2021 will be reduced from an anticipated $126.4 billion loss in 2020, and that it sees “optimism” at least in domestic tourism markets. Nevertheless, it adds, “the pain of the crisis increases.”
Recently released profit statements in the US illustrate the wildly up-and-down nature of the sector as the global pandemic continues to rage:
• Delta Air Lines lost $1.2 billion in the first quarter, more than expected, but executives said the airline could be profitable by late summer if the budding recovery in air travel continues.
• United Airlines posted a $1.36 billion loss in the first quarter. The loss would have been even wider without federal payroll aid, but it was still slightly worse than expected.
• American Airlines lost $1.25 billion in the first quarter and continued to slash costs, including delaying delivery of new jets as it waits for air travel to recover from the pandemic, but chairman and CEO Doug Parker said the airline continues to see signs that demand for tickets is improving.
• Southwest Airlines is the first major US airline to report a profit since the pandemic started, but it took a strong push from taxpayers to so: the airline received $1.45 billion in federal aid. Southwest also depends less on business travellers than its rivals.
“This crisis is longer and deeper than anyone could have expected,” said Willie Walsh, IATA’s Director General. “Losses will be reduced from 2020, but the pain of the crisis increases. There is optimism in domestic markets where aviation’s hallmark resilience is demonstrated by rebounds in markets without internal travel restrictions. Government imposed travel restrictions, however, continue to dampen the strong underlying demand for international travel.
“Despite an estimated 2.4 billion people travelling by air in 2021,” he continued, “airlines will burn through a further $81 billion of cash.”
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