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