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IATA: Airlines had weaker financial results

The latest airline financial results for the first quarter of 2021 confirm that the beginning of the year was weaker than originally expected, IATA reported.

The main reason, according to that international organization: new virus spikes halted or reversed the recovery of air travel in many major markets.

Overall, industry-wide net losses were close to the level seen in the fourth quarter of 2020.

But the global picture hides regional variations. North American airlines showed the most significant reduction in net losses as willingness to travel began to rebound in the United States in March amid progress in vaccines.

On the other hand, Asia Pacific airlines in the IATA sample remained the lowest performers (57% net losses vs. Q4) due to new Covid-19 outbreaks and quiet international travel in the region.

IATA

Initial financial results for the second quarter of 2021 show that net losses decreased significantly in North America and profitability is likely to recover in the second half of 2021.

In particular, the operating environment in the region has improved.

While domestic air travel in the United States hovers at pre-crisis levels, there are some positive developments in international and business travel, a major source of income before the pandemic.

A total of 26 North American airlines posted an average 39% drop in their Earnings Before Interest and Taxes (EBIT).

The BAII is an indicator of the operating result of a company without taking into account the interests and financial costs, which depend on the way in which the company is financed and the interest rates and without taking into account the corporate tax that can vary between different countries.

Likewise, the BAII is one of the magnitudes generally provided by companies in their accounting, financial and stock market information statements and serves as a measure to compare business results.

 

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