The International Air Transport Association says that lower yields will mean that world airlines will lose $314 billion in passenger revenues this year comparted to 2019.
For airlines operating in the Asia-Pacific region, the cost of COVID-19 pandemic will be $113 billion in losses, followed by those in Europe whose drop in revenues are estimated to reach $89 billion. North American air carriers are expected to see a loss of $64 billion.
In terms of revenue passenger kilometres, worked out by multiplying the number of paying passengers by the distance travelled, Europe is estimated to be the biggest loser, logging a 55 per cent drop, followed by airlines in the Middle East and Africa (down 51 per cent). In the Asia-Pacific region, the loss has been put at 50 per cent).
The forecasts were made on the assumption that the domestic lockdown lasts three months, till the end of Q2, while international travel restrictions are assumed to be eased more slowly, with only 50 per cent of international revenue passenger kilometres recovered by Q4 (after a reduction due to the recession impact).
“We have never seen a downturn this deep before. In our latest scenario, full year passenger revenues plummet 55 per cent compared to 2019, while traffic falls 48 per cent. In other words, half our business disappears. That’s catastrophic.
“That impact is then amplified throughout the economy. If airlines lose one job, another 24 disappear somewhere in the value chain. That was behind our analysis last week when we said that some 25 million jobs are at risk,” IATA Director-General Alexandre de Juniac said.
Traffic at Malta International Airport dropped by 64.5 per cent last month when compared to the same month a year earlier. The airport said that travel restrictions due to the COVID-19 outbreak also led to decreases of 46.6 per cent in aircraft movements and 48.1 per cent in seat capacity. Furthermore, a dwindling demand for travel caused seat load factor for the month to fall to 55.6 per cent from a healthy 81.3 per cent in March 2019.
Air Malta last week said the prevailing circumstances were such it was forced to mitigate costs, including in its payroll.
The national air carrier has grounded the majority of its fleet saying the outbreak meant its operations now consisted of just two flights a day, when the scheduled average used to reach 20 daily. It said there has also been an “extraordinary” number of cancellations, and, therefore, reimbursements, apart from the obligation to continue servicing fixed costs, such as aircraft lease payments.