From January to September 2020, the number of passengers on international flights can be reduced by approximately 1.2 billion people compared to the same periods of the previous years. This is stated in the forecast of the International Civil Aviation Organization (ICAO).

According to experts, amid a sharp decline in demand, the global air passenger flow risks falling by almost two-thirds relative to the initial forecasts. As a result, in the first nine months of the year, financial losses in the revenues of global airlines can range from $ 160 billion to $ 253 billion.

The consequences of coronavirus and the massive introduction of quarantine measures provoked the largest drop in global civil aviation in history. This was in an interview with RT the first vice-president of the all-Russian public organization of small and medium-sized enterprises "Support of Russia" Pavel Sigal. 

“The COVID-19 pandemic and subsequent strict quarantine measures in most countries led to the closure of land and air borders, which provoked a massive reduction in passenger traffic. According to a recent study by the Boston Consulting Group (BCG), airlines around the world decommissioned about 49% of their fleet because they simply have nowhere to fly. The market is actually quarantined, ”the expert emphasized.  

At the same time, airlines are still forced to spend money on servicing aircraft, parking aircraft and paying salaries to employees. This was told to RT by the director of the sales office of BCS Broker Vyacheslav Abramov. According to him, in case of prolonged quarantine amid rising costs, some carriers may be on the verge of bankruptcy. 

“Almost all aircraft are leased (finance leases), and this is the most serious expense item for any airline. Of course, many board owners are now in the position of their customers and are discussing individual conditions with airlines. Nevertheless, if the situation worsens, then companies will not be able to pay under leasing agreements, which will lead to the loss of some fleets and, as a result, to the departure of some global airlines from the market, ”the analyst explained.

Empty airports

According to ICAO experts, North America airlines risk significant losses. First of all, we are talking about US carriers. According to Pavel Sigal, at present the States are the leader in the number of coronavirus infected, which is why the country's largest airlines have already suspended up to 90% of scheduled flights.

“The US national aviation industry is in a difficult position due to the catastrophic decline in air passenger traffic. If large companies still have the resources to ride out the crisis, then small carriers, which depended on charter flights, risk going bankrupt by the time the quarantine is lifted, ”the expert explained.

Meanwhile, according to ICAO, European carriers were in even more difficult situations. According to the organization’s specialists, according to the results of April, occupancy of seats on European flights may be reduced by 92%. At the same time, during the peak summer for the countries of the region, the indicator will also show negative dynamics. 

“Against the backdrop of the pandemic, Europe is facing the worst tourist season in decades. In the summer, EU countries were one of the most popular resorts in the world, and local carriers made the main ticket office in these months. Now they suffer record losses. For example, the German Lufthansa loses about € 24 million per day. Before the onset of the crisis, the airline’s reserves amounted to about € 4 billion. Thus, the reserves may last for a maximum of six months, ”said Vyacheslav Abramov.

The crisis of the global civil aviation market has also affected Russian companies, experts interviewed by RT admit. The largest national carriers have already stopped selling tickets for international flights, and domestic routes are also being reduced. At the same time, companies began to focus on freight transportation, which could mitigate the impact of the COVID-19 pandemic on the industry. This opinion was expressed in a conversation with RT by the head of the analytical research department of the Higher School of Financial Management Mikhail Kogan.

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“Russian air carriers are now not as easy as their counterparts abroad. However, key companies have already increased their freight traffic by an order of magnitude in order to reduce costs due to reduced passenger flights. In addition, state support for the industry in the framework of the anti-crisis program of 23 billion rubles has a positive effect. I do not exclude that the industry will still need additional injections from the government, but the funds will help companies wait out the crisis season, ”the expert noted. 

According to the estimates of RT analysts surveyed, the global aviation industry can recover no earlier than 2021. According to Vyacheslav Abramov, even in the case of smooth removal of quarantine restrictions, states will not immediately open their borders. As a result, the passenger air transportation market will continue to remain under pressure.

“It all depends on the pace of stopping the pandemic and the subsequent lifting of restrictions. Current forecasts indicate that the disease will not recede earlier than at the end of summer. As a result, international flights can resume, most likely, only in the spring of 2021, ”the expert concluded.