Continued government relief measures needed to get airlines through the winter
The IATA warned that airlines will have a tough winter season ahead as the group calls on governments around the world to continue providing relief measures amid the COVID-19 crisis.
June 23, 2020
By PLA Editor
The International Air Transport Association (IATA) warned that the airline industry faces a hard winter and called on governments around the world to continue providing relief measures as the COVID-19 crisis continues.
Airlines are expected to post a loss of $84.3 billion in 2020 and government financial relief is a lifeline to many airlines. The bulk of airlines make their money in the northern summer season, while the winter season, even in the best of times, is a struggle to remain profitable. For example, the 2019 net profit margin for European airlines followed the normal seasonal pattern and was 9 percent and 17 percent respectively in Q2 and Q3 (northern summer). But it started at -1 percent in Q1 and finished the year at 2 percent in Q4 (northern winter). The winter season will be even more challenging amid the recovery from COVID-19.
Public opinion research in the first week of June 2020 showed greater caution among travelers in returning to travel. Only 45 percent of travelers surveyed intend to return to the skies within a few months of the pandemic subsiding. A further 36 percent said that they would wait six months. That is a significant shift from April 2020 when 61 percent said that they would return to travel within a few months of the pandemic subsiding and 21 percent responded that they would wait about six months.