"Airline Industry's COVID-19 Losses Expected to Reach 237 Trillion Won"

[Asia Economy Reporter Yujin Cho] The losses incurred by global airlines hit hard by the COVID-19 pandemic are expected to exceed $200 billion (approximately 237.4 trillion KRW).

According to Bloomberg on the 4th (local time), the International Air Transport Association (IATA) stated that the cost losses suffered by the aviation industry over the three years from the COVID-19 pandemic last year through 2022 are expected to exceed $200 billion. This amount corresponds to the revenue earned by global airlines over the past nine years.

Major global airlines are projected to record a total deficit of $11.6 billion next year alone. Middle Eastern airlines, which rely on long-haul routes, are expected to incur a loss of $4.6 billion, while European airlines are forecasted to face losses of $9.2 billion. North American airlines are the only ones expected to show a net profit of $10 billion.

IATA also raised its loss estimates for this year. It analyzed that the cost losses for airlines this year will reach $52 billion, 8% higher than the initial estimate of $48 billion made in April. Last year's losses were revised from $126 billion to $138 billion.

The prolonged slump in long-haul routes connecting Asia, Europe, and North America, along with delayed recovery in business demand, remains the biggest obstacle to performance recovery. Global passenger numbers this year are expected to be at 40% of pre-pandemic levels. For next year, they are anticipated to decrease to one-quarter of the 2019 level.

However, air cargo demand is expected to increase by 8% this year and 13% next year compared to 2019, influenced by the rise in contactless shopping.

The report added that airlines, suffering from accumulated losses and deteriorating management, are now facing a new challenge of reducing carbon emissions. As international pressure, which began before the COVID-19 pandemic, intensifies, IATA has set a goal for the aviation industry to achieve net-zero carbon emissions by 2050.