The International Air Transport Association (Iata) has released new analysis showing that the airline industry is expected to remain cash negative throughout 2021.
Previous analysis (November 2020) indicated that airlines would turn cash positive in the fourth quarter. At the industry level, airlines are now not expected to be cash positive until 2022.
Estimates for cash burn in 2021 have ballooned to the $75 billion to $95 billion range from a previously anticipated $48 billion, driven by the weak start to 2021 as governments have tightened travel restrictions in response to new Covid-19 variants.
“Our best-case scenario sees airlines burning through $75 billion in cash this year. And it could be as bad as $95 billion. More emergency relief from governments will be needed. If governments are unable to open their borders, we will need them to open their wallets with financial relief to keep airlines viable,” said Alexandre de Juniac, Iata’s director general and CEO.
He said planning and preparation were crucial ahead of the restart.
“The UK has set a good example. Earlier this week it laid out a structure for reopening based on an improvement in the Covid-19 situation. This gives airlines a framework to plan the restart, even if it needs to be adjusted along the way. Other governments should take note as a best practice for working with industry,” said De Juniac.
