The airline industry is expected to remain cash negative throughout 2021, according to the latest analysis from Iata.
This outlook is bleaker than Iata’s previous analysis (November 2020) which indicated that airlines would turn cash positive in the fourth quarter of 2021. At the industry level, airlines are now not expected to be cash positive until 2022.
Estimates for cash burn in 2021 have ballooned to between US$75bn (in an optimistic scenario) and US$95bn (in a pessimistic scenario) from a previously anticipated US$48bn.
Iata said in a press briefing yesterday (February 24) that with governments tightening border restrictions, 2021 was shaping up to be a much tougher year than previously expected.
“More emergency relief from governments will be needed. A functioning airline industry can eventually energise 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 Director General and CEO.