The International Air Transport Association (IATA) said initial second-quarter results of airlines worldwide showed the worst quarterly performance based on its Airlines Financial Monitor for July 2020.

In a statement, IATA said initial Q2 airlines financial results confirmed the airline industry had its worst quarterly financial performance, extending the losses from the first quarter.

"Although airlines immediately imposed stringent cost-cutting measures to counterbalance the loss in revenues and preserve cash, operating losses deepened sharply," the airline organization said. 

IATA said the global airlines share price index fell in July, 2020, following the announcements of negative Q2 results and the fading of early summer optimism, as COVID-19 cases increased in some regions.

The performance of the global airline index diverged from wider equity markets as returning to a sustainable recovery path in travel demand will take time.

IATA noted that oil and jet fuel prices continue to increase in August, 2020, but the improvement has been slower compared with July as the fuel demand rebound levelled out in some regions.

"Looking forward, the recovery in global oil demand is expected to be weak and jet fuel demand to be a major source of this softness," IATA said. 

In June, both passenger and cargo demand continued to recover from the low point in April as countries ease lockdown measures.

The pace of recovery in passenger demand lagged the improvement in seat capacity.

IATA said looking forward, restarting the network to respond to weak and varying travel demand patterns will be a challenge for airlines.