The International Air Transport Association (IATA), which represents over 290 global airlines, has revised its estimate of cash burn for airlines from $48 billion projected in November 2020 to $75 billion in 2021 and could touch $95 billion if the recovery from the Coronavirus pandemic ais slower through 2021.
In its
November 2020 analysis, IATA had indicated that airlines would turn cash
positive in the fourth quarter of 2021, but with several countries grappling
with three Coronavirus variants found in UK, South Africa and Brazil, airlines
are now not expected to be cash positive until 2022, IATA said in its new
analysis presented at a media conference by IATA’s Director general and CEO, Alexandre
de Juniac in Geneva.
IATA said
2021 has had a weaker recovery than anticipated after governments tightened
travel restrictions in response to the COVID-19 variants, and forward bookings
for summer months of July and August are presently 78 per cent lower than pre-COVID
levels of 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 in cash this year. And it could be as bad
as $95 billion. More emergency relief from governments will be needed. A
functioning airline industry can eventually energize the economic recovery from
COVID-19. But that won’t happen if there are massive failures before the crisis
ends. If governments are unable to open their borders, we will need them to
open their wallets with financial relief to keep airlines viable,” said
Alexandre de Juniac, IATA’s Director General and CEO.
De Juniac
urged the governments to work with the industry to plan the restart in an
orderly and timely manner. “The UK has
set a good example. Earlier this week it laid out a structure for re-opening
based on an improvement in the COVID-19 situation. This gives airlines a
framework to plan the restart, even if it needs to be adjusted along the way.
Other governments should take note as a best practice for working with
industry,” he said.
Juniac said
efficient digital management of health credentials will be vital for global
recovery and the IATA Travel Pass, which airlines are increasingly adopting,
could play a crucial role in securing health data of passengers and sharing it
with the authorities. A growing list of airlines—including Air New Zealand,
Copa Airlines, Etihad Airways, Emirates, Qatar Airways, Malaysia Airlines,
RwandAir, and Singapore Airlines—have committed to doing trials with the
digital tool.
“Efficient digital management of health
credentials is vital to restart. Manual processes will not be able to cope with
volumes once the recovery begins. Digital solutions must be secure, work with
existing systems, align with global standards and respect data privacy. In
developing the IATA Travel Pass these are fully in focus. The IATA Travel App
will help to set the bar very high for managing health credentials, protecting
against fraud and enabling a convenient travel process,” de Juniac said adding “While
there is choice in the market for solutions, there should be no compromise on
the fundamentals, or we risk failing systems, disappointed governments and
travelers, and a delayed restart,”
He urged the
governments to adapt global digital standards in recording tests and
vaccinations data. “Speed is critical. Fraudulent COVID-19 test results are
already proving to be an issue. And as vaccine programs ramp up governments are
using paper processes and differing digital standards to record who has been
vaccinated. These are not the conditions needed to support a successful restart
at scale when governments open borders,” he said.
Photo credits: www.IATA.org
No comments:
Post a Comment