The 6 largest airline groups worldwide have collectively lost $110bn in 2020, as the coronavirus pandemic slashed demand for travel and restrictions hampered flights. The 6 groups – Delta Air Lines, American Airlines, Lufthansa Group, United Airlines, Air France-KLM, and IAG – have seen revenues drastically cut as the aviation industry fails to recover fully.
Record losses for airlines
Total losses for the 6 aforementioned airline groups during 2020 currently stands at a mind-boggling $110bn, according to data firm StockApps. The three largest U.S airlines have been hit particularly hard, posting record losses of $63.9bn since the beginning of the year. StockApps shed some light on precisely why, claiming,
“Massive cancellations of flights to control the spread of the virus led to huge drops in airline passenger revenues and caused staggering losses to the world’s largest airline companies.”
In Europe, the financial picture is only marginally better, with the continent’s three largest airline groups – Lufthansa Group, Air France-KLM, and IAG – losing $45.9bn in revenue. Losses were relatively modest for the first quarter of 2020 before accelerating dramatically as COVID-19 spread globally from March onwards.
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U.S airlines have lost the most
The three largest airline groups in the U.S – Delta, United, and American Airlines – have experienced an unprecedented drop in revenue amounting to $63.9bn. Delta has suffered the most with losses of $22.4bn for the year, while American Airlines and United Airlines have recorded losses exceeding $20bn each.
Q2 and Q3 revenues are particularly alarming for all three airline groups. Delta’s Q2 results show a staggering 88% drop in revenue, as does American Airlines’ 86% drop for the same period. Losses during Q2 were six-times worse for Delta than Q1, and the airline went on to lose an additional $9.5bn in the third quarter as it missed out on lucrative summer travel.
Compared to raking in $11.9bn during Q2 2019, American Airlines made just $1.6bn in Q2 2020. Things picked up slightly during the third quarter, as the airline dealt with a slightly-reduced 73% drop in revenue.
United Airlines has reported a 63% reduction in revenues for 2020 so far, losing $10bn in Q2 alone. The airline group has seen its stock price cut by 57% YoY down to $9.5bn, the largest stock plunge out of the three groups. While travel may pick up again as U.S airlines offer their cheapest fares on record, it does not look good for the nation’s three biggest airlines.
European heavyweights post significant losses
Lufthansa Group, the largest in Europe, lost over $10bn from January to June, as its capacity dropped by 61%. Revenue is unlikely to pick up significantly in the final quarter of 2020 after the airline announced it would operate just 25% of its pre-COVID flights during Q4.
Losses at Air France-KLM have exceeded $20bn for the year after the airline’s passenger network activity stood at just 40% of last year’s levels. While Air France-KLM showed promising recovery signs through a strong July and August period, renewed travel restrictions led to a disappointing September.
IAG, the Anglo-Spanish holding company in charge of British Airways and Iberia, lost $14.9bn so far this year with little to suggest a cause for optimism for the rest of 2020. Passenger capacity dropped over 78% for the third quarter, amounting to a total reduction of 64% for the year. The airline has announced it will operate just 30% of flights during Q4, so a quick recovery looks very unlikely.
Aviation suffers due to the COVID crisis
The latest financial figures come as no surprise to anyone. The COVID pandemic has severely affected travel both domestically and internationally. As countries continue to enter lockdowns and enforce travel restrictions to prevent a ‘second-wave’ over the winter, Q4 is likely to be just as bleak for airlines.
Do you see a 2021 recovery for airlines globally? Leave your thoughts in the comments.