Commercial Airlines facing staggering losses to hit $51.8B in 2021

Commercial Airlines facing staggering losses to hit $51.8B in 2021

The COVID-19 pandemic continues to paralyse the aviation industry, despite devastating 2020 and colossal revenue losses caused by the first and second waves of the pandemic. The growing number of COVID-19 cases, fears of travel restrictions due to the Delta variant, and concerns about the economic recovery all contributed to a new setback for the world's largest airlines, which were hoping for a steady recovery in the aftermath of the pandemic.

According to Stock Apps data, commercial airlines are expected to end this year with a profit loss of nearly $52 billion and revenues that are 43% lower than before the COVID-19 hit.

European Airlines was the hardest hit, with a $21 billion profit loss.

The aviation industry experienced consistent growth over the last decade, with revenues increasing at a CARG of around 5.3% between 2009 and 2019, reaching $838 billion that year.

However, after the pandemic, revenue streams fell to historically low levels, with the majority of the world's largest airlines failing to cover their operating costs. Although government aid from around the world has raised hopes for the global aviation industry's steady recovery, this scenario may take years. In addition to remaining one of the worst-affected sectors during the pandemic, the entire market is facing increased costs, including labour and fuel.

According to an International Air Transport Association (IATA) survey, commercial airlines' revenue in 2020 will be $373 billion, or 57% less than pre-pandemic projections. Although this figure is expected to increase by 25% year on year to $472 billion in 2021, it is still $100 billion less than revenues in 2008.

According to statistics, the global commercial aviation profit loss is expected to reach $51.8 billion this year, after the industry lost nearly $138 billion in 2020.

In terms of regional comparison, the majority of that loss, or nearly $21 billion, will be generated by European airlines. According to the IATA, Asian Pacific will suffer the second-largest profit loss of $11.2 billion this year.

Even before the COVID-19 shock, Middle Eastern and African carriers reported combined losses. However, according to an IATA survey, airlines from both regions are expected to lose $8.7 billion in 2021. Latin America and North America are next, with $5.6 billion and $5.5 billion in profit losses, respectively.

However, North America is the only region expected to see significant improvement next year, with airlines earning $9.9 billion in profit.

Almost 85% of people changed their travel habits; the greatest concern is contracting the virus while abroad.

Aside from increased costs and declining profits, the COVID-19 pandemic is causing massive changes in travel habits throughout the airline industry.

According to Inmarsat's Passenger Confidence Tracker 2021, 84% of respondents believe their travel habits will change after COVID-19. Approximately 35% of people have decided to travel less frequently by any means after the pandemic ends, with nearly 30% planning to travel less frequently by air.

With a 52% share of respondents, the most common reason for people not travelling abroad is fear of contracting the virus. However, the five other concerns that received a high proportion of responses were all related to the pandemic.

According to the survey, the most people in India, South Korea, and China have decided to travel less frequently in any way, while people in the United Kingdom, Greece, and Germany are the least likely to change their post-COVID-19 travel habits.