The airlines, suffocated, hold their general assembly

The International Air Transport Association (Iata) celebrates its 76th general assembly by videoconference starting Monday, in the shadow of a pandemic that has plunged the sector into a historic crisis since March and with no clear exit in sight.

An unprecedented impact

Covid-19 and the circulation restrictions imposed to prevent the spread of the virus left practically the entire world fleet grounded during the boreal spring.

Air traffic was at a low in April before slowly recovering in June and falling again in September with the resurgence of the virus.

The Iata evaluates the fall in traffic by 66% for the entire year 2020.

The organization believes that, globally, the sector will not regain its 2019 level before 2024, an estimate based on the arrival of a vaccine by the summer of 2021.

For 2020, it assesses the business volume of the sector at 419,000 million dollars (353,000 million euros), a drop of half compared to 2019, and forecasts losses that will approach 100,000 million dollars.

Harsh consequences for employment

Companies have already cut tens of thousands of jobs and according to a survey carried out by the Iata in October, 59% of the companies surveyed contemplate further cuts in the next twelve months.

Airlines for America, the federation that represents US companies, estimated that companies in the sector would cut a total of 90,000 jobs between March and December.

“To reach the productivity level of recent years, the number of jobs would have to be reduced by 40%,” estimates Iata.

Under perfusion of governments

Most governments mobilized about $ 160 billion in spring to help the sector, according to the agency. But before the second wave of the pandemic, which again depletes their boxes, airlines will need between 70 and 80,000 million dollars more, considers the general director of the organization Alexandre de Juniac.

For the moment, government support has reduced the damage.

But two large Latin American companies, the Chilean-Brazilian LATAM and the Colombian Avianca, filed for US bankruptcy law in May. Smaller companies, such as the South African South African Airways and Comair, the British Flybe or the Austrian and French branches of Level (IAG) went bankrupt.

Australian giant Virgin Australia, declared bankrupt, was bought by an American company.

In November, the South Korean company Korean Air concluded an agreement to buy compatriot Asian Airlines.

Goods keep transport alive

Although the pandemic stopped the transport of travelers in its tracks, that of goods remained afloat, especially with the shipment of masks and medical supplies at the beginning of the crisis and, perhaps soon, with the massive distribution of vaccines.

For several years, a large part of air cargo has been transferred from cargo planes to the holds of commercial aircraft.

According to the Iata, this activity normally represents 15% of the companies’ income. Since the crisis, due to the reduction in the number of aircraft, and with it the volume available in warehouses, rates have increased and cargo now represents between 20% and 25% of business volume.

And the environment?

Despite their weakened state, airlines, already under pressure from environmental NGOs before the crisis, will have to meet their commitments to cut their CO2 emissions by half by 2050 compared to 2005.

First, they are betting in particular on the use of agrofuels, which will represent 2% of the total volume of fuel consumed between now and 2025.

Companies will also need to adapt to new societal trends emerging from lockdown, in particular distance conferencing that could permanently usurp the highly profitable business travel segment.

sw / aue / bc / zm