Coronavirus: as Covid-19 crisis deepens, recovery hopes of battered Hong Kong, global airlines vanish over horizon
- ‘Airlines are quickly running out of cash. It is a matter of survival,’ global airline body CEO says, predicting US$61 billion will be burned through in three months
- Hopes hinge to a large degree on how quickly Chinese air sector can bounce back from pandemic crisis
The odds of airlines surviving the Covid-19 crisis have worsened, as a hoped-for rebound in world air travel will probably not come until 2021, an industry body has warned, adding that global carriers are expected to burn through US$61 billion of cash in the next three months.
The dire projections came as China, which the International Air Transport Association (IATA) previously believed would recover more quickly from the coronavirus epidemic, was experiencing stalled domestic travel and restricted overseas flights.
“Airlines are quickly running out of cash. It is a matter of survival, as we have this enormous cash problem in front of us,” IATA director general and CEO Alexandre de Juniac said at a weekly media briefing on Tuesday.
Global airlines are on the hook for US$35 billion in refunds for unused tickets, worsening a cash crunch that is likely to bankrupt some carriers. That prompted the global industry body to plead with travellers to accept vouchers instead.
According to projections made by the IATA, carriers are likely to register a net loss of US$39 billion from April to June. Airlines typically have a cash reserve of about two months’ revenue.