The International Air Transport Agency (IATA), a trade association for the world's airlines, has updated its estimates for passenger airline losses due to the ongoing COVID-19 pandemic. The new estimate sees revenue losses of $314 billion, which would represent a 55% drop from 2019. 

The new estimate comes on the same day Boeing Co. (NYSE:BA) said it had 307 airplane orders canceled in the first quarter, as airlines look to cut costs and conserve cash. There is currently no passenger aircraft manufacturing taking place in the United States, as both Boeing and rival Airbus (OTC:EADSY) have paused production at their plants in Washington, South Carolina, and Alabama.

empty airport gate area

Image source: Getty Images.

Escalating losses

Since the start of the crisis, the IATA has increased it estimated revenue losses as the pandemic has spread around the globe. On March 5, 2020, the group published an estimate saying an "extensive spread" scenario of the coronavirus would result in $113 billion in lost revenue for the world's passenger airlines. Then, on March 24, 2020, it said that assuming "severe travel restrictions lasting three months" would increase the losses to $252 billion.

The updated estimate reflects a "significant deepening of the crisis," it said. New additional assumptions include some international travel restrictions beyond three months, and a more global spread of COVID-19 causing a severe impact in Africa and Latin America, which had not seen a large presence of the virus in late March. 

It said that airlines could burn through $61 billion in cash reserves in just the second quarter and that "the industry's outlook grows darker by the day."