The International Air Transport Association (IATA) said the second-quarter losses recorded by the industry surpassed the annual industry-wide loss it suffered during the financial crisis over a decade ago.

IATA said based on a sample of airline financial results for the second quarter, representing 71% of global revenue passenger kilometers (RPKs), it showed an industry net loss of US$31.6 billion, with an EBIT margin of -97%.

"This quarterly net post-tax loss surpassed the annual industry-wide loss in the 2008 financial crisis," IATA said.

IATA noted that North American carriers suffered the largest losses, although some Asia Pacific airlines turned to profitability after posting large losses in the first quarter by reorganising their cargo business and benefiting from high cargo yields.

Q2 saw worst performance of industry

Meanwhile, IATA also confirmed that the second quarter saw the airline industry's worst quarterly performance based on its Airlines Financial Monitor for July-August.

"2Q2020 financial data confirmed the airline industry had its worst quarterly financial performance. Although airlines took steps to limit their losses by taking cost cutting measures and focusing on cargo business as an additional source of revenue, operating losses increased sharply resulting in a substantial drain on cash," the airline industry group said.

IATA said the world airlines share price index rose in August 2020, but is still over 40% down on the year so far. Its monthly performance outpaced wider equity markets for the first time since the beginning of the pandemic amidst positive news related to quick COVID-19 testing and vaccine development.

It noted that oil and jet fuel prices prices rebounded recently with the supply disruptions, but the outlook for global oil demand is still fragile indicating the recent rally in prices could be temporary.

"Both passenger and cargo demand continued their gradual recovery in August 2020. However, the pace of recovery in passenger demand lagged the rise in seat capacity, likely increasing cash burn of airlines," IATA said.

It noted that restarting the network in response to weak and varying travel demand patterns also continues to be a challenge for airlines.