The International Air Transport Association says airline passenger revenues drop has risen to $314bn as impact of COVID-19 bites harder. IATA, in its updated analysis on Tuesday, said airlines would record a 55 per cent decline in revenue compared to 2019. On 24 March, IATA estimated $252bn in lost revenues in a scenario with severe travel restrictions lasting three months.
“The updated figures reflect a significant deepening of the crisis since then,” the association said. According to IATA, the world is heading for a recession and the economic shock of the COVID-19 crisis is expected to be at its most severe in the second quarter when the GDP is expected to shrink by six per cent. “Passenger demand closely follows the GDP progression. The impact of reduced economic activity in Q2 alone would result in an eight per cent fall in passenger demand in the third quarter,” IATA said.
It explained that travel restrictions would deepen the impact of recession on demand for travel while the most severe impact was expected to be in Q2. The Director-General and Chief Executive Officer of IATA, Alexander de Juniac, said, “The industry’s outlook grows darker by the day. The scale of the crisis makes a sharp V-shaped recovery unlikely. Realistically, it will be a U-shaped recovery with domestic travel coming back faster than the international market.
“We could see more than a half of passenger revenues disappear. That would be a $314bn hit. Several governments have stepped up with new or expanded financial relief measures but the situation remains critical. Airlines could burn through $61bn of cash reserves in the second quarter alone. That puts at risk 25 million jobs dependent on aviation.” He stated that without urgent relief measures, many airlines would not survive to lead the economic recovery.