How much money have airlines lost so far in 2021?

A yellow Spirit Airlines plane and two small United Airlines jets taxi around an airport.A yellow Spirit Airlines plane and two small United Airlines jets taxi around an airport.

Financial losses for the global airline industry were sequentially smaller in the second quarter, but growing corporate optimism for the next 12 months isn’t shared by all as the COVID-19 delta variant undermines economic reopening and travel in many regions.

Airlines collectively lost $6.9 billion in the April-May period in 2021 compared to $14.4 billion in the first quarter of the year, according to new data from the International Air Transport Association. Leading the recovery were U.S. carriers, with an aggregate net profit of $96 million, that benefitted from a huge domestic market with one of the highest coronavirus vaccination rates in the world. Every other region was in the red, with European airlines absorbing $4.6 billion in losses.

IATA earlier this year forecast a $48 billion loss for member airlines in 2021.

In the second quarter, global passenger revenues declined by 50% compared to pre-crisis levels, with North American airlines again leading the way with a revenue decline of 49%. Cargo continues to be a savior for passenger airlines, with revenue up 72% from the 2019 level on the strength of strong demand and yields, IATA said in its financial report. Operating costs declined too, but at a slower rate (-35%) than revenues. Free cash flow improved 29% from the first quarter based on IATA’s sample of airlines.

The global airline share prices increased in August following the U.S. Federal Drug Administration’s approval of Pfizer Inc.’s (NYSE: PFE) COVID-19 vaccine. But the year-to-date performance of global airline stocks still lags broader equity markets. Average share prices are up 3.9% since the start of the year, but are down 27.5% since December 2019. By comparison, the overall stock market grew 13.8% since January and 30% since the end of 2019, according to Refinitiv.

Following several months of upward trajectory, average Brent crude oil and jet fuel price ticked down in August over concerns the delta variant will slow global growth and because oil producers increased output. However, by month’s end Brent  had recovered most of its decline, with middle distillates like jet fuel recapturing most of the price slide. Jet fuel prices are currently around $71.60 per gallon. 

Business confidence 

Airline industry officials are exhibiting increased signs of worry that new COVID-19 restrictions in some large domestic markets, specifically China, along with more international travel restrictions, will dampen the recovery. Also, rising infection numbers and hospitalization rates are discouraging travelers irrespective of government intervention. 

Airline bookings for U.S. carriers slowed for the fourth consecutive week as measured through Aug. 15. They are down 58.9% compared to 2019, the lowest level since mid-May, according to a report from Bank of America. Year-over-year bookings the prior week were down 53.8%

Southwest Airlines (NASDAQ: LUV) this month said it has seen bookings decline and cancellations increase, and expects 20% less revenue in August than previously projected.

A major casualty of the COVID resurgence could be corporate travel, a big profit center for airlines. Several conferences, including the New York Auto Show and The International Air Cargo Association’s annual meeting,, have been postponed and some companies are extending return-to- office dates until 2022.

In general, CFOs and heads of cargo surveyed by IATA in July were more optimistic about the future of air travel and profitability. Although passenger yields were low in the second quarter, they are expected to improve in the next 12 months as demand improves. Also, cargo yields are expected to remain elevated. 

Nearly three-quarters of survey participants said they expect passenger traffic to pick up with vaccination rollouts around the world, but a quarter said they expect no change, or a deterioration, in net losses due to the new COVID wave.

The survey showed 72% of respondents expect cargo demand to increase – up from 56% in the April survey – as capacity improves with the reintroduction of international passenger flights over the next year. 

A continuing concern for 55% of respondents was the reduction in workforce associated with airline restructuring, which is making it difficult for airlines to operate with desired schedules. Airline executives said they expect the labor situation to improve, with only 15% saying they expect further decreases in employment levels compared with 24% in the April survey. 

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Airlines to lose $48B despite banner year for air cargo