Global airlines need another US$80bn to survive COVID-19 says trade body
Global airlines will need another huge cash injection if they are to survive the current coronavirus crisis, according to the latest assessment from industry trade body IATA.
“For the coming months, the industry’s needs are evaluated at US$70-80 billion in additional aid,” Alexandre de Juniac, IATA’s director-general said at the Paris Air Forum.
“Otherwise some airlines will not survive.”
Global airlines have already received US$160bn in financial support to help cope with restrictions that have seen fleets grounded for months and that even now are flying at only a fraction of pre-COVID-19 levels.
IATA had previously projected the losses for the sector this year will amount to US$87bn, but this might conservative De Juniac said, adding that the full-year deficit would likely be nearer US$100bn.
The trade body added that earlier predictions of a return to pre-crisis traffic levels in 2024 might also be too optimistic with passenger numbers at best to be 50-60% at best at the end of 2021.
How much appetite there remains to keep bailing out troubled airlines remains to be tested with signs that fatigue might be starting to set in.
Norwegian Air recently had a request for billions more cash turned down by its government on teh grounds that the additional money could not be justified.
Other airlines, meanwhile, continue to run deep in the red.
Earlier this week, UK carrier EasyJet PLC (LON:EZJ) posted an annual loss of £1.2bn as passenger numbers halved over the twelve months.
Capacity in the quarter to December will be a fifth of the original plans, it added, with the emphasis only on routes that generate cash.
The airline has already raised £3.1bn in additional finance, but is still cutting back capacity to keep costs in check.
Hopes of a recovery in air travel have been boosted by good news on teh vaccine front recently, but even the most optimistic forecasts do not see mass vaccination as a reality until well into 2021.
Shares in IAG rose 1.4% to 157.4p while EasyJet added 1.9% to 735.4p.