The International Air Transport Association has revealed that airlines are on the verge of a looming cash crisis.
It warned that the airline industry would lose $77bn in during the second half of 2020 despite the restart of operations, according to a statement titled ‘Looming cash crisis threatens airlines,” dated October 6.
IATA explained that the slow recovery in air travel would see the airline industry continuing to burn through cash at an average rate of $5bn to $6bn per month in 2021.
The international body representing 290 airlines called on governments to support the industry during the coming season with additional relief measures, including financial aid that does not add more debt to the industry’s already-highly-indebted balance sheet.
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Till date, governments around the world have provided $160bn in support, including direct aid, wage subsidies, corporate tax relief, and specific industry tax relief including fuel taxes, IATA said.
IATA’s Director-General, Alexandre de Juniac said, “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.