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Airlines cut global traffic forecast on recovery setbacks

A woman makes her way in the departures area of the Terminal 2E at Charles-de-Gaulle airport in Roissy

PARIS (Reuters) - Air traffic will recover more slowly than previously expected from the COVID-19 pandemic, as vaccination delays and government "risk aversion" slows the reopening of routes, global airlines body IATA said on Wednesday.

Global traffic this year will amount to 43% of pre-crisis levels based on passenger numbers and distance flown, the International Air Transport Association said, below the 51% it had forecast late last year.

IATA also predicted industry losses of $47.7 billion in 2021. While that represents an improvement on last year's $126.4 billion deficit, the organisation warned that airlines would continue to need government wage support.

"This crisis is longer and deeper than anyone could have expected," Director General Willie Walsh said.

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The latest industry outlook also sheds light on the multi-speed recovery underway, with large domestic markets led by the United States and China surging ahead. Europe, by contrast, will see only one-third of its 2019 traffic this year, IATA predicts.

Industry revenue is likely to grow 23% from last year's low to $231 billion, it also forecast - still far below the $607 billion generated a year earlier.

Cargo demand will continue to be a bright spot outpacing passenger traffic with 13.1% growth in 2021 to exceed its 2019 level, IATA predicted. Total cargo volumes are seen at 63.1 million tonnes, close to their pre-crisis peak in 2018.

(Reporting by Laurence Frost; editing by David Evans and Jonathan Oatis)