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Airline industry to remain cash negative in 2021 - IATA

Airline industry to remain cash negative in 2021 - IATA

Mubasher: The airline industry is forecast to continue witnessing negative cash flow in 2021 due to the severe impact of the coronavirus (COVID-19) pandemic, the International Air Transport Association (IATA) warned.

The airline industry is not expected to be cash-positive until 2022, departing from IATA's November analysis referring that airlines would turn cash positive in the fourth quarter (Q4) of 2021, according to a recent press release.

IATA's Director General and CEO, Alexandre de Juniac, explained at a media briefing that the tightening travel restrictions amid the COVID-19 outbreak spark concerns about the worsening financial prospects of airlines.

The industry's cash burn rate is estimated to increase to the $75 billion to $95 billion range in 2021, compared to a previously anticipated $48 billion.

Juniac said: "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 in cash this year. And it could be as bad as $95 billion."

IATA's Director General and CEO added: "More emergency relief from governments will be needed. A functioning airline industry can eventually energize the economic recovery from COVID-19."