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Leading Edge: IATA revises outlook for airline industry performance in 2021

January 18, 2021  By Wings Staff

The International Air Transport Association over the past three months issued two critical statements addressing the Canadian government’s approach to its domestic aviation sector during the Covid-19 pandemic. In December, IATA expressed “deep disappointment and frustration” that the government has failed to provide concrete support. At the start of January, as coronavirus surged across the world, IATA once again expressed frustration with Canada’s new Covid-19 testing requirement for all arriving air travellers needing a negative test result before boarding a plane.

The frustration within IATA’s second statement, publically shared by Canadian operators, largely pointed to a lack of preparation in implementing the new testing, but it was not long after that the United States implemented similar measures to face more infectious Covid-19 strains emanating out of the UK and South Africa. IATA’s first statement of disappointment, however, focuses on what has been a year of inaction to support one of the country’s most important economic engines.

Prime Minister Justin Trudeau on January 12 announced a range of cabinet moves, including the appointment of Omar Alghabra as the new federal minister of transport. Alghabra succeeds Marc Garneau, who remains in the federal cabinet as minister of foreign affairs. The shuffle was largely initiated by the departure of Navdeep Bains, minister of innovation, science and industry, who announced his decision to not to run in the next election.

A mechanical engineer by trade, Alghabra holds a Master of Business Administration and was a Distinguished Visiting Fellow with the Faculty of Engineering and Architectural Science at Ryerson University. He has worked in various roles with General Electric Canada, Enbala Power, and the Ontario Energy Board. In his new role with Transport Canada, Alghabra will also continue to help lead the investigation into the Ukraine Airlines Flight 752 tragedy. Alghabra takes on a very challenging portfolio in the current environment, but the shuffle is a welcome change if only to provide a new voice and level of commitment to address the pressing needs of Canadian aviation.


Alexandre de Juniac, who has served as the lead voice for the global commercial airline industry since 2016 as director general and CEO of IATA, is stepping down in March, to be succeeded by Willie Walsh, former CEO of International Airlines Group. de Juniac and his team have done an admirable job over the past year providing the industry with the sharp realities of pandemic economics. 

In November 2020, this included a revised, difficult outlook for airline industry performance in 2020 and 2021. Deep industry losses will continue into 2021, even though performance is expected to improve. IATA projected a net loss of US$118.5 billion for 2020 (deeper than the US$84.3 billion forecast in June) and a net loss of US$38.7 billion is expected in 2021 (deeper than the US$15.8 billion forecast in June).

After a difficult first half of 2021, IATA projects aggressive cost-cutting will combine with increased demand during 2021, which could result in turning cash-positive by the fourth quarter – earlier than previously forecast. “This crisis is devastating and unrelenting. Airlines have cut costs by 45.8 per cent, but revenues are down 60.9 per cent,” said de Juniac. “This loss will be reduced sharply by $80 billion in 2021. But the prospect of losing $38.7 billion next year is nothing to celebrate.”

This projection, however, was based on the re-opening borders with testing and/or the availability of a vaccine. The New Year, had a difficult start in controlling Covid-19, with slower than expected vaccinations in many countries, including Canada. The country’s aviation industry is ready for new leadership to provide a way forward. | W


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