IATA: 2020 worst year ever, but some recovery likely by 2022
The International Air Transport Association is now calling 2020 the worst year in aviation history.
The airline trade group made some big updates to its predictions for the prospects of recovery in the aviation industry.
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IATA now says it believes domestic air travel could recover by 2022. "Aggressive cost-cutting is expected to combine with increased demand during 2021 (due to the re-opening of borders with testing and/or the widespread availability of a vaccine) to see the industry turn cash-positive in the fourth quarter of 2021, which is earlier than previously forecast," it added.
Related: US airlines see cancellations rise amid COVID warnings against Thanksgiving travel
Unfortunately, that's where the good news ends. The group is still anticipating a full recovery to 2019 pre-pandemic air travel won't happen until at least 2024. It also says the industry will lose more money than first anticipated both this year and next. For the full year 2020, IATA suggests a net loss of more than $118 billion dollars. That is much deeper than the estimates of a loss of $84 billion in June. Next year, it's expecting a net loss of nearly $39 billion - also much more than originally forecast back in June.
Related: Global air travel unlikely to recover until 2024
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"It's the worst peacetime year for commercial aviation since the industry started a 100 years ago. Outside of war, we've never seen anything where demand evaporated by as much as 90%. 2020 for all of us -- restaurant owner to retailer to airline -- almost everyone in every industry is looking at 2020 as a year of dread," Henry Harteveldt, a travel industry analyst and president of Atmosphere Research told TPG. "We're eager to put this year behind us. 2021 won't be a flash cut to normalcy, but a lot of us have our fingers crossed that we will begin the process of returning to normalcy."
IATA’s Director General and CEO Alexandre de Juniac said in a statement, “This crisis is devastating and unrelenting. Airlines have cut costs by 45.8%, but revenues are down 60.9%. The result is that airlines will lose $66 for every passenger carried this year."
Tim Jue is a San Francisco-based reporter covering airlines and travel. He said while a 2022 domestic recovery is "good news for airlines with robust domestic networks, it suggests there’s a longer road ahead for the big established global airlines," he said, "We are starting to see the light at the end of the tunnel, but the real worry is what’s going to happen to the travel industry before we get to that point. Demand will come back, but the near-term impact to some companies and workers impacted by the downturn could be insurmountable."
And that sentiment was echoed by JohnnyJet founder and editor-in-chief John E. DiScala (aka Johnny Jet) who said, "it's a little concerning that they are predicting international recovery will take until 2024. Since the vaccine will take some time to roll out it looks like the key will be rapid, accurate testing. I know as soon as the health officials say it's safe to travel I'm going to be crisscrossing the country to give my loved ones a big hug."
"We need to get borders safely re-opened without quarantine so that people will fly again. And with airlines expected to bleed cash at least until the fourth quarter of 2021 there is no time to lose,” said IATA's de Juniac.
Related: IATA says secondary hubs to lose out in pandemic
Indeed, Harteveldt said the idea of a steep recovery is now unlikely. He said his company's research with airlines, travel planners and travel managers suggests it will be 3.1 years from the time vaccines become widely available for a return to a full pre-COVID-19 levels of airline travel. "Countries are going to recover on different timelines, based on availability of vaccines, and populations. It's not going to be a smooth upward curve. It may be steady progress. But it may look more like a series of steps," he aid.
"We believe, based on the research we've done with airlines, the leisure market should recover in two to two and a half years. Business travel will take longer to recover because business travel is not monolithic," said Harteveldt. "There's essential travel that's been ongoing, but when I talk with business travel buyers and managers, they tell me their externally focused business travel, such as sales calls or working with customers, will likely be at the forefront of resuming once again the company feels its safe for employees to start traveling."
Related: What's next for travel industry now that Joe Biden is President-elect?
He told TPG, group meetings, off-sites and convention travel will resume much later based on safety. Indeed, he said that 7% of managers he spoke to last month said they didn't expect a return to pre-COVID-19 level travel for the next five years.
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- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
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- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.