Newsnow Desk: Iata had in June released its financial outlook for the global air transport industry, showing that airlines would lose $84.3 billion in 2020.
The International Air Transport Association (Iata) on Tuesday warned that the airline industry will burn through $77 billion (Dh282.6 billion) in cash during the second half of 2020 despite the restart of operations.
This means the airlines will burn almost $13 billion (Dh47.7 billion) a month, or $300,000 per minute (Dh1.1 million) during H2 of 2020.
The global body forecast that the slow recovery in air travel will see the industry continuing to burn through cash at an average rate of $5-6 billion per month in 2021. The industry is not expected to turn cash-positive until 2022, it added.
Governments have to date provided $160 billion in support, including direct aid, wage subsidies, corporate tax relief, and specific industry tax relief, including fuel taxes.
Iata had in June released its financial outlook for the global air transport industry, showing that airlines would lose $84.3 billion in 2020.
According to the latest figures from the Air Transport Action Group, the severe downturn, combined with a slow recovery, threatens 4.8 million jobs across the entire aviation sector. Because each aviation job supports many more in the broader economy, the global impact is 46 million potential job losses and $1.8 trillion dollars of economic activity at risk.
Alexandre de Juniac, director-general and CEO of Iata, said historically, cash generated during the peak summer season supports 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.
“The crisis is deeper and longer than any of us could have imagined. And the initial support programmes are running out. Today, we must ring the alarm bell again. If these support programmes are not replaced or extended, the consequences for an already hobbled industry will be dire,” he added.