Airlines may lose $95bn in 2021 — IATA

The International Air Transport Association (IATA) yesterday hinted that the airline industry may lose $95 billion this year.

Daily Trust reports that IATA previously estimated cash burn of $48 billion in 2021 for airlines but the estimates ballooned to $75bn and now $95bn.

At the industry level, airlines are now not expected to be cash positive until 2022.

This is against previous analysis indicating that airlines would turn cash positive in the fourth quarter of 2021.

IATA,

representing some 290 airlines carrying 82 per cent of global air traffic, blamed the negative forecast on Weak Start for 2021.

According to the analysis, “it is already clear that the first half of 2021 will be worse than earlier anticipated.”

“This is because governments have tightened travel restrictions in response to new COVID-19 variants. Forward bookings for summer ( July-August) are currently 78% below levels in February 2019 (comparisons to 2020 are distorted owing to COVID-19 impacts),” the report added.

It said in this case 2021 demand would be 38% of 2019 levels while airlines would burn through $75bn of cash over the year.

On the other hand, the report noted that pessimistic scenarios would see airlines burn through $95bn over the year.

The report added that there would be an improving trend from a $33bn cash burn in the first quarter reducing to $16bn in the fourth quarter.

IATA’s DirectorGeneral and CEO, Alexandre de Juniac, commenting on the analysis called for more emergency relief from governments for airlines to survive the headwinds.