The International Civil Aviation Organization (ICAO) estimates that airlines worldwide could face losses amounting to $253 billion by September this year due to COVID-19.
This comes even as estimates show that by September 2020, airline passengers will have reduced by 1.2 billion owing to the suspension of international passenger flights, a move that seeks to curb the spread of the virus.
In its statement, ICAO further notes that the most significant reduction in numbers will be felt across Europe, followed by the Asia-Pacific.
The report further outlines the following:
- 19% year-on-year drop in air freight for the month of March, measured in tonnes transported
- 22% drop in air freight revenues
- Belly cargo is down 31%
- All freighter capacity is up 9%
- As of April, global passenger capacity is down 91%
According to the ICAO baseline scenario, referencing originally planned capacity, passenger numbers could have risen by 64 million in the first nine months of 2020, while revenues could have increased by $15 billion.
Already, a number of airlines have either asked for state bailouts, are laying off staff, or have entered into voluntary administration. Examples are:
- South African Airways: Plans to lay off all its staff
- Norwegian Air: To lay off about 4700 pilots and crew
- Virgin Australia: Entered voluntary administration
- Air Mauritius: Entered voluntary administration
Earlier on in March this year, the International Air Transport Association (IATA) reported that airlines worldwide would need $200 billion (KSh20.8 trillion) capital injection for them to remain afloat in this COVID-19 pandemic. At the time, 75% of the airlines only had cash to cover three months of their fixed expenses.
Article by Kenyan Wall Street