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Airlines forecast losses of $84B globally this year, won't recover until 2024: IATA

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Peter Cerda - IATA Regional Vice President for the Americas joined Yahoo Finance's On The Move to discuss the road to recovery for the airline industry that's been rocked by the pandemic.

Video Transcript

JULIE HYMAN: As of today, passengers on inbound flights into the US from international destinations will no longer undergo what are called enhanced screening procedures, including temperatures checks and symptom questionnaires. Plus their contact info will no longer be gathered in order to do contact tracing. Let's talk about this with Peter Cerda. He is regional vice president for the Americas at the International Air Transport Association.

Peter, thank you so much for joining us. Appreciate it. So what effect is this going to have on the industry? Are there safety concerns, for example, among some of the airline employees as we see some of these measures being pulled back a bit?

PETER CERDA: Well, first of all, thanks very much for having me on the show. These are really important steps that the US government is taking. As the globe is slowly reopening its borders, we've had almost a global shutdown for many, many months. And this is an important measure, particularly because air transport so important to the US economy.

What is this going to bring? This should bring more confidence to the market. Hopefully it's going to stimulate more people begin to travel, particularly people from outside the country visiting the US for business or for family reasons. This is an initiative that the US government took part for many, many months.

And it really was not very successful. Only 30 cases were able to be confirmed from almost 1 billion passengers on a million flights that came into the US. There are protocols are now implemented on a global basis that are going to make sure that air travel is safe. So we are very encouraged by these steps that the US government is taking. And we hope other governments throughout the country, around the world are going to be doing the same.

ADAM SHAPIRO: Peter, you talk about confidence. And it was Ed Bastian, CEO from Delta, who told us on this program-- it was almost two months ago-- that the rates of infection of COVID-19 for his staff, the people onboard the planes, was actually lower than in the general population. And yet that kind of confidence-- I mean, that's a data point you can't ignore-- that kind of confidence doesn't help when we got today, I think, Lufthansa's reporting that international travel for them is only at 10% of what it was at year ago levels.

And then we hear from the industry that we won't be back to levels we saw in 2019 until 2024. How do the airlines survive without international travel? We're going to lose some of the airlines, aren't we?

PETER CERDA: It's a very challenging situation right now. The forecast that we have is about $84 billion collectively on a global scale in terms of losses. For North American carriers, it's about $23 billion, considering when in 2019, North American carriers made about $17 billion.

International transport is going to be the last segment of travel that we're going to see recuperate, as you mentioned, about 2024. We're hoping for domestic service to recover in about 2023 timeframe. But it is going to be a challenging period of time. You see airlines are reducing their capacity. They're reducing their destinations.

And we need to really bring back the consumer confidence. And by doing that, it's demonstrating to consumers that travel is safe. There are global protocols in place now that safeguard transportation for passengers, that air transport won't be a vector of the virus. And we need to do more of that. We need to show that public confidence is beginning to grow.

But we also need countries around the world to open their borders. We have a vast amount of countries around the globe that the borders are closed. And even US citizens are not being permitted to go into different parts of the world, like Europe or in parts of Latin America as well.

DAN ROBERTS: Peter, Dan Roberts here. You mentioned that these precautions were kind of not that effective anyway in discovering cases. And I just wonder, I mean, is the conclusion there, is it a consensus that that's a sign things are getting better? Or might it have just meant that the precautions being taken were not so effective for whatever reason? I guess what I'm really asking is might there be people who see that these precautions are being relaxed a little bit and actually that might make them more nervous, because as we know, it's very much still a problem, the pandemic.

PETER CERDA: Well, I think it's the contrary. I think the industry has done a very good job in working with countries around the world and the international civil aviation organization to create protocols, biosafety protocols in which governments, airlines, airports are implementing that are going to safeguard passenger travel. And I think that is the essence why we're seeing improvements.

These protocols were developed back in June, and now being applied and implemented throughout the world. And now it is very safe to travel. The governments have done their part. Airlines and airports are doing their part.

And for passengers, they also have to do their part by wearing face mask, the using social distancing at airports, on board the airplanes with the HEPA filters, which guarantee a very high level of purity of the air. So all these factors and these protocols being implemented is what's really reducing the risk. Or we're not seeing the number of cases that one would expect on air travel.

ADAM SHAPIRO: Peter, when we talk about everyone doing their part, there is a push by the airlines to get additional assistance from the US government so that they don't have to furlough. Delta today, by the way, announced that they would not be furloughing flight attendants until next year if necessary. But other airlines need that additional US assistance. Has the International Air Transport Association come out in favor of whether the government should step up again to help the airlines?

PETER CERDA: Well, we've made a general advocacy campaign of this around the world. It is a major issue. The industry, this is the worst time in our history.

Most airlines have capital for about four or five months, not more than that. So it is a difficult situation for the industry. And we are asking the US government to help, as we've asked other governments throughout the world to also intercede with air travel in those markets as well.

JULIE HYMAN: Peter, thanks for your time today, Peter Cerda is IATA regional vice president for the Americas. Appreciate it.

PETER CERDA: Thank you.