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aviationApril 24, 2021

IATA upbeat on aviation rebound in Mideast, cuts loss forecast

Middle Eastern carriers will benefit from relatively rapid vaccination rates on home markets, the International Air Transport Association (IATA) has said.
The global airlines’ body, which reduced by more than half its estimate of the net losses faced by the regional aviation sector in 2021, said the region’s carriers would incur losses of 13.8 per cent of revenues as it warned that the across the world airlines could be facing combined losses of $47.7 billion in 2021 due to COVID-19.
IATA’s estimate of losses for Middle Eastern carriers for this year has been reduced from 28.9 percent of revenues estimated in 2020, the third smallest regional loss.
Former British Airways owner IAG boss Willie Walsh, who now heads IATA, said, “The crisis is longer and deeper than anyone could have expected. Losses will be reduced from 2020, but the pain of the crisis increases.”
The loss estimate came as IATA also reduced its forecast for passenger numbers and distance flown in 2021 to 43 percent of 2019’s levels, down from a previous estimate of 51 percent.
In an earlier report, IATA had warned that several airlines in the Middle East faced a heightened risk of bankruptcy despite the industry receiving $4.8 billion in government aid in 2020. Most of this support was distributed through direct cash injections.
IATA Regional Vice-President for Africa and the Middle East Kamil Al Awadhi noted that government relief for airlines avoided massive failures that would jeopardise a restart.
In 2020, Middle Eastern carriers lost $7.1 billion as they recorded a 72 percent drop in passenger demand compared to 66 per cent globally and a 63 per cent drop in capacity compared to 57 percent globally.
According to estimate, airlines in the Middle East lost $68.47 for every passenger they flew in 2020 compared to a loss globally of $66.04.
However, air cargo was a bright spot for the Middle East carriers as cargo volumes only dropped 10 percent while that was not enough to offset the losses from the passenger side of the business.
Connectivity in the region fell by 60 per cent at the low point of the crisis. Before the crisis there were 1060 unique international routes at the low point of the crisis there was 440. And the density of those connections has become much thinner. Job losses could grow to 1.7 million in the Middle East in aviation and related industries, IATA said.