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IATA: airline passenger revenue down 74%

Airline passenger revenue declined sharply in the first quarter of 2021 (74% compared to the same quarter of 2019) due to stagnant air travel demand and pressure on yields, IATA reported.

On the other hand, the cargo business maintained its strength, increasing 50% compared to the first quarter of 2019 as the economy in general.

IATA is the trade association for the world’s airlines, accounting for some 290 airlines or 82% of total air traffic.

In addition, IATA supports many areas of aviation activity and helps formulate industry policy on critical aviation issues.

Overall, cargo revenue was not enough to offset the heavy loss in the passenger business, resulting in a 65% drop in overall revenue.

Despite all efforts by airlines to cut costs, the year-on-year decrease in operating costs was limited to 40%, IATA added.

While variable costs, i.e. fuel, landing, and user fees, decreased in line with falling revenue, while reductions in fixed/semi-fixed costs were limited.

IATA

The passenger business in the first quarter caused airlines to burn cash at a rate similar to that of the fourth quarter of 2020.

Net cash outflows from operating activities represented 8.0% of revenues.

However, there was a regional variation. The United States and some of the US airlines reported a cash balance for the month of March amid the strong rebound in US domestic travel.

Meanwhile, European and Latin American airlines reported the most significant operating cash outflow as the increase in Covid-19 cases was affected.

Although airlines continue to focus on limiting capital expenditures (13.9% of revenues), free cash outflows were 21.9% of revenues.

In the second half of the year, IATA expects cash flow pressure to ease with recovery in demand for summer vacations.

 

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