Soaring Debt, Record Losses: The Airline Crisis in Four Charts

(Bloomberg) -- Airlines around the world will resume flying this month after an unprecedented shutdown forced by the coronavirus pandemic. Projections released by the International Air Transport Association show just how grim the situation has become as carriers hemorrhage cash and pile up borrowings.

Here are four charts revealing the depth of the crisis:

IATA, which represents 290 airlines, calculates that the industry has received $123 billion in various forms of state aid. Of that amount, $67 billion or 55% is repayable, creating a debt time-bomb for airlines seeking to survive off greatly reduced revenues in a shrunken travel market.

Add in credit raised in private markets and airline debt has jumped by about $120 billion. IATA says that’s unsustainable and that governments will need to convert their own funding to equity or endure a wave of mass bankruptcies.

IATA says airlines will lose a combined $100 billion this year and next. That dwarfs the $31 billion loss during the 2008-2009 recession, itself reckoned to be the worst economic slump since the Great Depression of the 1930s.

The Asia-Pacific region is set to sustain the heaviest losses this year at $29 billion, IATA calculates, followed by North America and Europe. Allow for the size of airline sectors though and it’s a different story, with Africa expected to suffer a loss equivalent to 30% of revenue, versus 15% in North America.

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