IATA International Air Transport Association : Challenging outlook for airlines, despite vaccine progress

COVID-19

Challenging outlook for

airlines, despite vaccine

progress

Brian Pearce

Chief Economist

12th January 2021

1

According to financial markets pandemic is over

Challenges for air travel recognized in sub-par airlines share prices

Equity price indices, January 2020 = 100

	120				FTSE All World share
	110
2020				price index
100
in Jan
90
100
80				Reuters Global Airlines
equal
70				share price index
to
Indexed	60
50
	40
	Jan-19	Mar-19May-19	Jul-19	Sep-19Nov-19Jan-20	Mar-20May-20Jul-20Sep-20Nov-20

Source: IATA Economics using data from Refinitiv Eikon

Transition from cash burn to cash generation in sight

But difficult next 6 months for airlines as cash burn continues

USD billion

Airline industry quarterly cash burn forecast

10

0

-10

-20

-30

-40

-50

-60

2020Q2

2020Q3

2020Q4

2021Q1

2021Q2

2021Q3

2021Q4

Source: IATA Economics

November data shows stalling of global air travel

Global RPKs slowed after summer rise almost to a complete stop

Global RPKs, billion, seasonally adjusted

800 700 600 500 400 300 200 100

0 Jan-19Mar-19May-19Jul-19Sep-19Nov-19Jan-20Mar-20May-20Jul-20Sep-20Nov-20

Source: IATA Economics using data from IATA Statistics