German airline company Lufthansa reported its worst quarterly earnings in the last 67 years on Thursday with a loss of $1.77 billion dollars. The company in its forecast also said that it was not expecting the business to rebound to pre-Covid numbers before the year 2024.
COVID-19 impact: Air travel unlikely to take off and soar high anytime soon! Signalling the extent of damage to the airline industry due to Covid-19 pandemic, German airline company Lufthansa reported its worst quarterly earnings in the last 67 years on Thursday with a loss of $1.77 billion dollars. The company in its forecast also said that it was not expecting the business to rebound to pre-Covid numbers before the year 2024. The company’s statement comes in the wake of many countries reporting another wave of infections and imposition of restrictions on travel and movement similar to the first wave. Echoing the estimates of Lufthansa, Geneva-based International Air Transport Association (IATA) also said that the passenger numbers would not come back to the pre Covid level before the year 2024, according to a report by the Indian Express.
The IATA has also estimated the air traffic to fall by a humongous 63 percent in comparison to the previous year. If the estimate turns out to be true then the financial losses to the industry during the current crisis will outdo the havoc the industry faced during the 2008 economic crisis with a total loss of $85 billion dollars. The crisis can also get compounded due to the fact that a large number of airlines rely solely on the summer season to compensate their losses they bear throughout the year.
Even without any major crisis popping up last year, a total of 27 airlines had shut their shops last year reflecting the headwinds the industry faces on a regular basis. According to the Bloomberg report, the number of airlines who have closed their business this year has already reached 34 and the number is only going to increase. However, the total number of carriers that had to pack up in the 2008 global economic crisis was much higher at 63. Among the airlines which have got closed this year are UK-based Flybe, SunExpress Deutschland, Miami Air, and the OpenSkies unit of IAG SA.
With many countries still under some form of lockdown and movement restrictions and resurgence of Covid-19 cases, the sentiment of the travellers is expected to remain muted in the short term. The establishment of what has been termed ‘air bubbles’ between different countries has eased the hardships to some extent but only those wanting to travel on an urgent basis are expected to fly in the short term.