The global airline industry's net losses might widen to $118.5 billion in 2020, the International Air Transport Association (IATA) said on Tuesday.
In its revised outlook for airline industry performance in 2020 and 2021, it said that deep losses will continue into 2021, even though performance is expected to improve over the period of the forecast.
A net loss of $118.5 billion is expected for 2020, deeper than the $84.3 billion forecast in June.
Nevertheless, a net loss of $38.7 billion is expected in 2021 more than the $15.8 billion as projected by the previous forecast.
"Performance factors in 2021 will show improvements on 2020; and the second half of 2021 is expected to see improvements after a difficult 2021 first half," the association said in a statement.
"Aggressive cost-cutting is expected to combine with increased demand during 2021 (due to the re-opening of borders with testing and or the widespread availability of a vaccine) to see the industry turn cash-positive in the fourth quarter of 2021 which is earlier than previously forecast."
According to IATA, the pandemic crisis has challenged the industry for its very survival in 2020 as it faced half a trillion-dollar revenue drop from $838 billion in 2019 to $328 billion.
"This crisis is devastating and unrelenting. Airlines have cut costs by 45.8%, but revenues are down 60.9%. The result is that airlines will lose $66 for every passenger carried this year for a total net loss of $118.5 billion," said IATA's Director General and CEO Alexandre de Juniac.
"This loss will be reduced sharply by $80 billion in 2021. But the prospect of losing $38.7 billion next year is nothing to celebrate. We need to get borders safely re-opened without quarantine so that people will fly again. And with airlines expected to bleed cash at least until the fourth quarter of 2021, there is no time to lose."