The airline industry trade association IATA ran a media briefing last week designed to keep travellers and the aviation world up to date with its activities and efforts to keep people flying.

Director General Alexandre de Juniac fronted a virtual press conference last Wednesday.  Nothing that he said was unexpected, noting that to survive airlines will have to ring costs in line with revenues.  He warned that although fuel charges have fallen with the reduction in flying there is an expectation of higher prices in 2021.

Perhaps his major point was one that it is universal within the industry.  It is the use of systematic pre-departure testing to safely re-open borders without quarantine measures. It is being completely ignored by the British Government whilst supported by many other countries.  

He presented new analysis showing that the airline industry cannot slash costs sufficiently to neutralize severe cash burn to avoid bankruptcies and preserve jobs in 2021.

Total industry revenues in 2021 are expected to be down 46% compared to the 2019 figure of $838bn. The previous analysis was for 2021 revenues to be down around 29% compared to 2019. This was based on expectations for a demand recovery commencing in the fourth quarter of 2020. Recovery has been delayed however, owing to new Covid-19 outbreaks, and government mandated travel restrictions including border closings and quarantine measures. IATA expects full year 2020 traffic to be down 66% compared to 2019, with December demand down 68%.

“The fourth quarter of 2020 will be extremely difficult and there is little indication the first half of 2021 will be significantly better, so long as borders remain closed and/or arrival quarantines remain in place. Without additional government financial relief, the median airline has just 8.5 months of cash remaining at current burn rates. And we can’t cut costs fast enough to catch up with shrunken revenues,” said Mr de Juniac.

www.iata.org/en/pressroom