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IATA: Global Airline Industry to Remain Cash Negative in 2021

Covid-19 measures will keep the global the airline industry cash negative throughout 2021, said the International Air Transport Association (IATA) revising its previous forecast (November 2020) which has predicted a positive turn in Q4 2021. 

According to IATA’s recent analysis, airline companies are expected to go cash positive after 2022 with estimates for the cash burn this year to range between 75 billion and 95 billion dollars – up from the previously estimated 48 billion dollars.

Meanwhile, bookings for the summer months (July and August) are still down by 78 percent compared to February 2019.

“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 dollars in cash this year. And it could be as bad as 95 billion dollars,” said Alexandre de Juniac, IATA director general and CEO.

De Juniac said more emergency relief from governments will be needed, adding that “if governments are unable to open their borders, we will need them to open their wallets with financial relief to keep airlines viable”.

IATA is calling on governments to take three crucial steps that will ensure the safe restart of travel: planning and speed, health credential verification, and setting global standards.

In this direction, IATA said its Travel Pass will enable travelers to securely control their health data and share it with relevant authorities. The association added that a “growing list” of airlines, including Air New Zealand, Copa Airlines, Etihad Airways, Emirates, Qatar Airways, Malaysia Airlines, RwandAir, and Singapore Airlines, are expressing interest.

“Efficient digital management of health credentials is vital to restart. Manual processes will not be able to cope with volumes once the recovery begins,” said de Juniac pushing for the implementation of IATA’s travel pass, which is along the same lines as the idea tabled by Greece in the EU for a vaccination certificate

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