The COVID-19 pandemic has had a significant impact on the aviation industry due to travel restrictions and a slump in demand among travelers.Significant reductions in passenger numbers have resulted in flights being cancelled or planes flying empty between airports, which in turn massively reduced revenues for airlines and forced many airlines to lay off employees or declare bankruptcy. Some have attempted to avoid refunding cancelled trips in order to diminish their losses. Airliner manufacturers and airport operators have also laid off employees.

Government regulations in Europe and the United States mandate airlines to refund fares when flights are cancelled, but in many cases airlines have instead offered vouchers or travel credits that must be used by the end of the year. (Some airlines have extended the voucher window to May 2022.) Early March 2020 saw 10% of all flights cancelled compared to 2019. As the pandemic progressed, 40–60% fewer flight movements were recorded in late March with international flights affected the most. By April over 80% flight movements were restricted across all regions.Research shows that world recovery of passenger demand to pre-COVID-19 levels is estimated to take 2.4 years (recovery by late-2022).

At the end of March, cargo capacity was down by 35% compared to the previous year: North America to Asia Pacific capacity fall by 17% (19% in the opposite direction) Asia-Pacific to Europe was down by 30% (reverse: -32%), intra-Asia was down by 35%. Lagging the capacity reductions, demand was down by 23% in March, resulting in higher freight rates: from China/Hong Kong, between March 2 and April 6, +158% to Europe and +90.5% to North America.The cargo shortage may evaporate if the global economic crisis depresses demand: the WTO forecast a global trade contraction of 13–32% in 2020.International mail between many countries stopped completely, either due to suspension of domestic service or lack of transportation.

Business aviation was less affected than airline traffic, in that top executives’ travel is often considered essential. London Biggin Hill Airport reported traffic to be around 30% of 2019 levels, with transatlantic traffic strong. Once lockdown restrictions are eased, business aviation has an opportunity to capture premium passengers who might previously have chosen airlines, but who may prefer the social distancing afforded by a private jet.United States air charter travel strongly increased in February and March as airlines slashed schedules, making commercial flights increasingly unpredictable.

On 5 March 2020, the International Air Transport Association estimated that the airline industry could lose between US$63 to 113 billion of revenues due to the reduced number of passengers. IATA had previously estimated revenue losses of around US$30 billion two weeks before their 5 March estimate.By 17 March, IATA had stated that its 5 March estimate was “outdated”, and that airlines would require $200 billion in bailouts to survive the crisis.IATA further revised their revenue loss estimate in 24 March to be $252 billion globally, a 44 percent drop. Another further estimate was published on 14 April, which forecasted a revenue drop fo $314 billion (55 percent) and a traffic drop of 48 percent in passenger count for 2020.

In April global passenger capacity is down 91%; the ICAO anticipates 1.2 billion fewer travellers by September 2020 compared to a typical year, a revenue fall of $160–253 billion for the first nine months of 2020.While European airlines owe $10 billion for cancelled flights, IATA is predicting a 55% fall in revenue compared to 2019, a $89 billion hit, costing $452 billion on the wider economy. Boeing anticipates passenger traffic recovering in two to three years to 2019 levels, but expects production to take longer.

By mid-April, 14,500 mainline airliners were stored, leaving 7,400 active: one third of the whole fleet, even one fifth for European carriers; down from 20,200 in active service and 1,800 in storage before. By mid-June, 10,500 were still stored while 11,500 were active, with an average daily utilisation down by 35% from 2019; led by Asia-Pacific airlines with almost 75% of the fleet flying, then Europe with one third still stored, then North America with a 50/50 split.