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Airline industry expected to remain cash negative throughout 2021: IATA

This summer is make-or-break for many airlines and holiday companies which are struggling to survive with close to a year of almost no revenue due to pandemic restrictions.

February 25, 2021 / 07:24 AM IST
Reuters

Reuters

Global airline industry body IATA warned that the outlook for airlines had weakened since its December forecasts, and due to tightening travel restrictions it now expected the sector to still be bleeding cash by the fourth quarter of this year.

IATA raised its forecast for total airline cash burn for 2021 to between $75 billion and $95 billion, up from the $48 billion it had forecast in December.

While many countries have started rolling out vaccines to tackle the novel coronavirus, the emergence of more infectious variants in countries such as Britain, Brazil and South Africa has forced many governments to ban all but essential travel.

This summer is make-or-break for many airlines and holiday companies which are struggling to survive with close to a year of almost no revenue due to pandemic restrictions. Without it many will need extra funds after burning through cash reserves.

Britain's Heathrow Airport said on Wednesday it had plunged to a 2 billion pound loss in 2020 and that digital health checks were now vital to building any kind of recovery in international travel.

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A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

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IATA also said on Wednesday it planned to launch a COVID-19 travel pass at the end of March, bringing into use a digital system for test results and vaccine certificates which will help facilitate travel.

As for measures that will prepare the industry to safely restart after a year or more of disruption, the governments can ensure that airlines are prepared to reconnect people and economies by working with industry to develop the benchmarks and plans that would enable an orderly and timely restart, it said.

“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,” said de Juniac, the IATA’s Director General and Chief Executive Officer (CEO).
Reuters
first published: Feb 24, 2021 08:01 pm

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