IATA: Airlines lose $300,000 per minute globally
Aviation Updates Philippines – The
International Air Transport Association (IATA) on Tuesday warned government
authorities that airlines will “burn through” $77 billion in cash ($13
billion/month or $300,000 per minute) during the second half of 2020 amid
continued efforts to restart flights worldwide.
The airline organization said governments should support airlines during the
winter season through the means of financial aid “...that does not add more
debt to the industry’s already-highly-indebted balance sheet.”
Governments worldwide have already pledged $160 billion in support, including
direct aid, wage subsidies, corporate tax relief, and specific industry tax
relief, including fuel taxes.
“We are grateful for this support, which is aimed at ensuring that the air
transport industry remains viable and ready to reconnect the economies and
support millions of jobs in travel and tourism. But the crisis is deeper and
longer than any of us could have imagined. And the initial support programs
are running out. Today we must ring the alarm bell again. 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.
“Historically, cash generated during the peak summer season helps to support
airlines through the leaner winter months. Unfortunately, this year’s
disastrous spring and summer provided no cushion. In fact, airlines burned
cash throughout the period. And with no timetable for governments to reopen
borders without travel-killing quarantines, we cannot rely on a year-end
holiday season bounce to provide a bit of extra cash to tide us over until the
spring,” said de Juniac.
Furthermore, IATA expects the airline industry to recover to cash positive not
until 2022 fully. Even as airline companies significantly reduced their
operating expenses, the 80 percent sharp drop in revenues, compared to 2019,
offset the gains.
Photo from photo101, Flickr
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