International Air Transport Association (IATA) has shared projections for the global airline industry’s revenue loss in the coming year. Spoiler alert: It’s not looking good. A devastating hit to airlines’ bottom lines, of course, could have huge ripple effect on destinations and tourism.
And to further complicate things, not all airlines are ready to comply with government mandates around COVID-19, which these airlines say will only exacerbate the revenue plunge. In fact, three of Britain’s biggest air carriers have just taken legal action in an attempt to curb government regulations and limit their economic losses.
A Big Hit
Not taking into account the possibility of a second wave of COVID-19, airlines now face losses of $84 billion in 2020, with a further projection of another $15 billion in losses for 2021. Brian Pearce, IATA’s chief economist, projects a ‘V’ recovery pattern for the industry, with the biggest dip in 2020 but big losses continuing in the coming year.
Such a bleak outlook is unprecedented in the airline industry. As reopenings begin around the world, domestic travel is predicted to increase in June and July, while international travel likely won’t pick up until Q4. The vulnerability of the entire industry could mean less connectivity for many places—and many fewer nonstop flights to second- and third-tier destinations.
Where weaker airlines going out of business would traditionally mean growth opportunities for the giant carriers, even the most cash-rich airlines may not be in a position to expand and take over new routes. And as Forbes points out, this loss of revenue for the airline industry will impact the whole economy—especially tourism. A loss of air connectivity could have dire consequences for some destinations.
Big British airlines are fighting to mediate the dramatic revenue losses that 2020 has in store. After the British government announced the implementation of a two-week mandatory quarantine for anyone entering the U.K., three of the country’s biggest airlines took legal action. British Airways, Ryanair and easyJet said the quarantine will cripple tourism and the wider economy, including MICE industries, and will prolong the already damaging effects that COVID-19 has had on the industry.
In a joint statement, the three airlines said they want “the government to re-adopt its previous quarantine policy introduced on March 10, where quarantine is limited to passengers from ‘high risk’ countries.”
To help travelers, including planners, figure out which destinations are accessible at this time, IATA has launched an interactive travel restrictions map. Check out which countries are allowing travel and where you might be able to host future events here.
The post Airline Industry Could Lose $100 Billion, But the British are Fighting Back appeared first on Smart Meetings.