Airline industry to suffer $118.5bn loss this year, says IATA

The airline industry will suffer a record $118.5 billion loss this year, according to the International Air Transport Association (IATA).

At its annual meeting, the industry body said the financial impact of the COVID-19 pandemic will be much worse than the $84.3 billion loss forecast in June and called on governments to reopen borders to travel, stressing that testing will be key to loosening quarantine rules.

01:09

A dramatic drop

Dutch airline KLM hosted this year's virtual meeting of IATA on Tuesday at its main hub, Amsterdam Airport Schiphol, which was eerily quiet.

The airport usually welcomes around 200,000 passengers a day, but now those numbers have dropped to just 36,000 on average. Airports around the world have recorded comparable dramatic drops in traveler figures.

Although next year is expected to improve for airlines, many companies are struggling to survive. They are surviving on financial life support from governments, which have injected $173 billion. Although this helped to avoid bankruptcies on a massive scale, it may not be enough to prop-up struggling companies in the near future.

In October, the Franco-Dutch airline group Air France-KLM reported a quarterly operating loss of $1.2bn. /Regis Duvignau/File Photo/Reuters

At the meeting, the IATA appointed Willie Walsh, former CEO of International Airlines Group (IAG) as its eighth director-general from April 1, 2021.

He will succeed Alexandre de Juniac, while KLM's chairman, Pieter Elbers, was appointed to the Board of Governors.

CLICK: THE UNLIKELY SOCIAL MEDIA STAR FACING UP TO SOCIETY'S STIGMAS

Mandatory vaccination

Alan Joyce, the CEO of Australian airline Qantas, said on Tuesday that passengers on international flights will have to be vaccinated against COVID-19 before boarding its planes.

Deserted departure halls and check-in desks at Amsterdam Schiphol Airport. /CGTN

Other airlines are not sure they will make vaccination mandatory. "The fact that vaccines may soon be available is a good sign and may restore passengers' confidence to travel again," said a spokesperson for KLM, adding that "it is too early to say whether these vaccines will become obligatory on all our flights."

The body forecast deep industry losses to continue into 2021, even though performance is expected to improve. And it will take a very long time before the industry is back on pre-pandemic levels.

Cover image: Gonzalo Fuentes/Reuters