Wednesday, October 07, 2020

Covid fallout: Global airline industry will burn through $77 billion cash in second half of 2020

The global airline industry will burn through USD 77 billion in cash during the second half of 2020 despite the resumption of flight services amid the coronavirus pandemic, said airlines body IATA on Tuesday. “The slow recovery in air travel will see the airline industry continuing to burn through cash at an average rate of USD 5 to USD 6 billion per month in 2021,” said the International Air Transport Association (IATA) in a press release.

The IATA has around 290 airlines as its members comprising 82 per cent of global air traffic. “The cash drain continued during the summer months, with airlines expected to go through an additional USD 77 billion of their cash during the second half of this year and a further USD 60-70 billion in 2021. The industry is not expected to turn cash positive until 2022,” the release noted.

The aviation sector in India has also been significantly impacted due to the pandemic. For example, in July, the country’s largest airline IndiGo declared a net loss of Rs 2,884.3 crore for the first quarter of 2020-21.

All airlines in India have taken cost-cutting measures such as pay cuts, leave-without-pay and firing employees in order to conserve cash. India resumed domestic passenger flights from May 25 after a gap of two months due to the coronavirus pandemic. The airlines have been allowed to operate only a maximum of 60 per cent of their pre-COVID domestic flights. Scheduled international passenger flights continue to remain suspended in India since March 23 due to the pandemic. However, special international flights have been permitted since May this year.

06/10/20 PTI/Financial Express

To Read the News in full at Source, Click the Headline


Post a Comment