The year 2020 was one of the most challenging years for the aviation industry. The passenger traffic during the year fell by 67% year-over-year (YoY).
According to the research data analyzed and published by Comprar Acciones, between January 1 and December 20, 2020, airlines operated a total of 16.8 million flights. During a similar period in 2019, there were 33.2 million flights recorded, 97% higher than the 2020 figure.
The industry recorded 2.9 trillion passenger kilometers globally, compared to 8.7 trillion in 2019. As a result of travel restrictions, airline passenger traffic for the year dropped to levels last seen in 1999, erasing 21 years of growth for the industry. While domestic flights dropped by 40% compared to 2019, international flights sank by 68%.
Based on Cirium’s report, North America and the Asia Pacific got back on the path to recovery faster than all other regions. On the list of the top 10 busiest airports worldwide, USA had seven entries while China had three.
The busiest airport was in Atlanta and had 250,800 flights during the year. Chicago was second with 228,000 flights and Dallas was third with 227,200 flights. In China, the busiest airport was Guangzhou with 158,700 flights. It ranked sixth on the list.
Aviation Industry Net Loss Dropped From $118.5 Billion in 2020 to $38.7 Billion in 2021
According to IATA, 2020 was the aviation industry’s worst financial year on record. Total industry revenue for the year was $328 billion, down from $838 billion in 2019.
Passenger numbers fell to 1.8 billion during the year, a level that was last seen in 2003. Compared to 2019’s 4.5 billion, the numbers were 61% lower YoY.
While demand sank by 66%, load factor plummeted to 65.5%, the lowest level on record since 1993. Low demand, in turn, translated to a massive passenger revenue drop from $612 billion in 2019 to $191 billion.
In order to stay afloat, air carriers cut costs by 45.8%, from $795 billion in 2019 to $430 billion in 2020. Unfortunately, airline revenue was down 60.9%. Consequently, airlines were estimated to lose about $66 for every passenger carried in 2020, resulting in a net loss of $118.5 billion.
IATA projects that cash burn would continue up to the end of 2021, estimating a loss of $38.7 billion for the year. Overall revenue is projected to rise to $459 billion in 2021, $131 billion higher than the 2020 figure. But that would still be 45% lower than the 2019 total.
Passenger numbers are forecast to increase to 2.8 billion, a significant improvement, but still 1.7 billion less than in 2019. The passenger load factor will increase to 72.7%, well below the 82.5% pre-pandemic level. At the earliest, IATA projects that passenger levels will return to pre-pandemic levels in 2024.
Cargo operations were not as badly hit as the passenger business. In spite of a 45% decline in capacity, cargo revenue shot up from $102.4 billion in 2019 to $117.7 billion in 2020. Though the increase did not make up for the passenger revenue drop, it helped airlines sustain their struggling international business. It is estimated that the air cargo business will recover to pre-pandemic levels during 2021.
Asia Pacific Airlines to Post $7.5 Billion Loss in 2021
While the worldwide air travel market is still a long way from full recovery, regional discrepancies are significant.
Air carriers in Asia Pacific are expected to lead the global recovery process. The Asia Pacific flight volume shrunk by close to 45% YoY in 2020. It remained the largest market globally and even gained slightly in other regions.
At the end of Q3 2020, domestic air travel in China and Russia had fully recovered. Per IATA data, China was only down by 2.8% YoY in passenger kilometers flown on domestic markets, while Russia was 2.7% higher YoY. Comparatively, the US was 65% lower compared to 2019.
At the end of 2020, the East Asian and Pacific region had a remarkable recovery, rising to 73% of pre-pandemic flights. North America at the time was conducting 55% of pre-crisis flights and Europe by 39%.
Overall, airlines in Asia Pacific lost approximately $31.7 billion in 2020, while in North America, losses topped $45.8 billion. IATA projects a loss of $7.5 billion for Asia Pacific carriers in 2021, the smallest loss for the top three regions in the global aviation industry.
On the other hand, North American carriers are expected to lose about $11 billion and European carriers $11.9 billion. However, North America is expected to have a strong recovery based on the size of its domestic market and its carriers’ financial strength prior to the pandemic.