Iata has warned airlines will continue to burn cash throughout this year and called on governments “to open their wallets”.
Airline association Iata reported it has revised its December forecast that the industry would return to being ‘cash positive’ by the last quarter of 2021 in light of tightened travel restrictions.
At the same time, Iata hailed the UK government’s inclusion of international travel in its roadmap to reopen the economy on Monday.
Iata director general Alexander de Juniac declared “the UK has set a good example and called on other governments to “take note” of this “best practice”.
The association forecast in December that carriers would collectively lose $48 billion this year, on top of $200 billion lost in 2020. Iata’s latest forecast suggests airlines will lose between $75 billion and $95 billion in 2021.
Iata chief economist Brian Pearce blamed the revision on the weaker than expected start to the year after governments tightened travel restrictions in response to new Covid-19 variants.
He reported forward bookings for July and August are 78% below the levels of February 2019.
Iata’s revised forecast offers two scenarios. One sees travel restrictions lifted gradually as the populations of developed economies are vaccinated and demand reach 38% of 2019 levels over the course of the year.
A more-pessimistic scenario envisages restrictions remaining through July and August, leaving demand at just 33% of 2019 levels and airlines burning $95 billion.
De Juniac warned: “More emergency relief from governments will be needed. If governments are unable to open their borders, we need them to open their wallets to keep airlines viable.”
Iata also urged governments to work with the industry on plans to restart flying “the moment it’s safe to re-open borders”.
De Juniac said: “The UK has set a good example. 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.”
He called for the rapid development of digital health credentials and global standards for recording vaccinations and Covid test results.
De Juniac said the Iata Travel Pass, an app already in use in multiple trials, “will help set the bar for managing health credentials, protecting against fraud and enabling a convenient travel process.”
But he warned: “Speed is critical. Fraudulent Covid-19 test results are already proving an issue.
“Manual processes will not be able to cope with volumes once the recovery begins. And as vaccine programmes ramp up, governments are using paper processes and differing digital standards to record who has been vaccinated. These are not the conditions to support a successful restart.”
De Juniac said “each day without standards means the challenge gets bigger” and called for “a plan to retrospectively record those who have already been vaccinated”.