Coronavirus: airline industry needs billions more in bailouts to survive, International Air Transport Association warns
- IATA says some airlines will go under without an increase to the US$180 billion of support already provided globally, mostly by governments
- Industry is set to burn through US$300,000 a minute over the second half of 2020
Global airlines need a fresh cash injection worth billions to stave off the increasing bankruptcy threat from Covid-19, the International Air Transport Association (IATA) has warned, with the industry set to burn a further US$77 billion, or US$300,000 a minute, in the second half of 2020.
Some carriers would find it impossible to survive without an increase to the US$180 billion of mostly government support already handed to the industry, a sum covering only 8½ months of sector losses that were likely to continue into 2022, the trade group said on Tuesday.
“We’re looking [at] airlines getting into trouble or failing without either further government support or airlines being able to access capital markets for more cash,” warned IATA chief economist Brian Pearce.
The already ruinous haemorrhaging of cash is having severe consequences on several affiliates in the AirAsia Group, one of the region’s pioneering low-cost airlines, which shut down its Japan operations on Monday, while its Indian arm is no longer being financially supported.
AirAsia X, its low-cost, long-haul unit, said on Tuesday it was seeking a do-or-die US$15 billion debt restructuring.
Cathay Pacific warned last week its monthly cash burn, which has hit HK$2 billion, would continue to be significant until passenger traffic rebounded to a much higher level.