NEW DELHI: The International Air Transport Association (IATA) in a fresh report has estimated that the airline industry will burn through $77 billion in cash during the second half of 2020 (almost $13 billion/month or $300,000 per minute), despite the restart of operations.
The slow recovery in air travel will see the airline industry continuing to burn through cash at an average rate of $5 to $6 billion per month in 2021, IATA said. IATA called on governments to support the industry during the coming winter season with additional relief measures, including financial aid that does not add more debt to the industry’s already-highly-indebted balance sheet. To date, governments around the world have provided $160 billion in support.
“If these support programs are not replaced or extended, the consequences for an already hobbled industry will be dire,” said Alexandre de Juniac, IATA’s Director General and CEO. IATA estimates that despite cutting costs just over 50 per cent during the second quarter, the industry went through $51 billion in cash as revenues fell almost 80 per cent.
The industry is not expected to turn cash positive until 2022. As for India’s aviation industry, the situation is no better. Except two airlines, all other payers continue to struggle hard to remain operational and have their net worth in negative territory.