IATA and OECD reveal the
bad news — May 2020

In June IATA published its biannual update of the airline industry economic performance. The economics team usually does this to coincide with the trade group’s annual general meeting — but this year the AGM has been postponed to December in deference to the lack of airline connectivity in the coronavirus crisis (although it is still currently planned to be a physical rather than virtual meeting). The forecasts do not make for happy reading: IATA bluntly points out that 2020 will be the worst year in the history of the airline industry.

With most of the world’s fleet grounded for a large part of the second and third quarters, the group is forecasting total passenger traffic demand to be down by 55% year-on-year (with a 20 percentage point drop in load factors to 62.7%), and passenger revenues to fall by 60% to $241bn. Cargo demand continues, but without the aircraft to fly it (50% of freight is carried in the belly-holds of passenger aircraft) and IATA is forecasting freight demand will be down by 17% year on year while, with the squeeze on capacity, freight yields could grow by 30% and total freight revenues could rise by nearly 10%.