IATA: Airlines To Turn Cash Positive In Q4

  • Burn Through An Extra $50bn
  •  IATA Chief Blasts ‘Quarantine Tunnel-Vision’ As Govts Reintroduce Lock-downs


The global airline industry will just about turn cash positive in Q4 2021 but not before it has burnt through almost $50 billion over the next three quarters, according to the International Air Transport Association (IATA).

Airlines around the world are estimated to have already rinsed around $125 billion of cash since Q2 2020, placing most in a severe liquidity crisis and forcing businesses to make drastic cost cuts.

The Middle East market alone is expected to lose $7.1 billion this year and it could take years for airlines to return to meaningful profitability.

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IATA’s chief has struck out at governments for their “knee-jerk” response to the new strain of COVID discovered at the end of last year, describing new restrictions in Canada, UK, Germany and Japan as a set-back for the airline industry.

“Science tells us that travellers will not be a significant factor in community transmission if testing is used effectively,” IATA’s CEO, Alexandre de Juniac, said on a media call on Tuesday.

“But most governments have tunnel-vision on quarantine and are not at all focused on finding ways to safely re-open borders—or alleviate the self-imposed economic and mental health hardships of the lockdowns.”

The UK on Monday removed the UAE from its list of air travel corridors, meaning returning passengers now have to quarantine for 10 days.

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The move is expected to significantly depress demand routes between the UK and UAE, which had been among the world’s busiest at the beginning of this year.

De Juniac said the industry is working “tirelessly” with governments to keep flying safe but that restrictions and their impact on airlines “got worse” over the New Year holiday period.


Foreign airlines in flight

“While we still see airlines turning cash positive within the year, the near-term picture is bleak. Instead of a boost from the year-end holiday period, we got even more restrictions.

“Governments tightened borders in a knee-jerk response to a virus mutation. Canada, UK, Germany, Japan and others added testing to their COVID-19 measures without removing quarantine requirements. In other words, they have chosen policy measures that will shut down travel.”

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De Juniac said that governments “appear to be aiming for a zero-COVID world”, which he described as an “impossible task”.

“A more balanced public policy approach is needed—one that is based on testing as a replacement for quarantines so that we can begin addressing the severe side-effects of COVID-19 policies,” de Juniac said.

Wole Shadare