Airlines to lose about $75 bn in 2021, says IATA


A new analysis released by the International transport association IATA states that the airline industry will be in cash negative throughout 2021; the analysis released in November 2020 stated that the airlines would turn cash positive in the fourth quarter of 2021.
But now, at the industry level, airlines are not expected to be in a favourable cash situation until 2022
The cash burn is estimated to be in a range of 75 to 95 billion dollars; the previously estimated amount was anticipated to be 48 billion dollars. IATA stated that the first half of 20201 is going to be worse than the anticipations made earlier. All this is because the government has tightened the restrictions because of the new covid 19 variants. The booking for summer is currently at 78% less than the February 2019 numbers.
The governments have tightened the border restriction, and 2021 has turned out to be more challenging than the last year. The best-case scenario will see airlines burning around 75 billion dollars this year, said the IATA director. This amount can also raise to 95 billion dollars.
The director of IATA also stated that emergency relief from the government is also required, and the functioning of the airline industry will, in the end, recover the economy, which went down because of COVID-19. The chances of this not happening if there are massive failures even before the crisis ends. If the governments cannot open the borders, they will have to start emptying their resources to help the airlines in reviving. With the fact that airlines have to burn cash through 2021 and the governments and industries have to be prepared for restarting as soon as the borders are opened.
With airlines now expected to burn cash throughout 2021, it is vital that governments and the industry are fully prepared to restart the moment governments agree that it is safe to re-open borders, IATA said.


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