Airline industry expected to stay cash negative in 2021: IATA

Airlines are expected to remain cash negative until 2022, the International Air Transport Association’s analysis showed on Wednesday.

However, previous analysis in November 2020 indicated that airlines would turn cash positive in the fourth quarter of 2021.

Estimates for cash burn in 2021 have ballooned to the $75 billion to $95 billion range from a previously anticipated $48 billion.

IATA said it is already clear that the first half of 2021 will be worse than earlier anticipated.

“With governments having tightening border restrictions, 2021 is shaping up to be a much tougher year than previously expected. Our best-case scenario sees airlines burning through $75 billion in cash this year. And it could be as bad as $95 billion,” IATA’s Director General and CEO Alexandre de Juniac was quoted as saying in a statement.

“More emergency relief from governments will be needed. A functioning airline industry can eventually energise the economic recovery from Covid-19. But that won’t happen if there are massive failures before the crisis ends. If governments are unable to open their borders, we will need them to open their wallets with financial relief to keep airlines viable.”

Besides, IATA said vaccines and testing will play a role as the pandemic comes under control and economies ramp up, including the travel sector.

“The ‘IATA Travel Pass’ will enable travelers to securely control their health data and share it with relevant authorities.”

At present a growing list of airlines – including Air New Zealand, Copa Airlines, Etihad Airways, Emirates, Qatar Airways, Malaysia Airlines, RwandAir, and Singapore Airlines-have done or are committed to doing trials with IATA Travel Pass.

In addition, statement said the IATA Travel App will protect against fraud and enable a convenient travel process.