The further tightening of the travel restrictions on the global aviation sector because of the Covid-19 pandemic has forced the global airline industry body IATA to reassess its December forecasts and warn of a bleaker outlook for the industry for the current year. The body now expects global airline industry to burn cash till the fourth quarter of the current year.
Compared to its forecast in December of $48 billion for total airline cash burn for 2021, the IATA raised its forecast for the metric for the year to between $75 billion and $95 billion in total.
Many governments across the world have been forced to ban all but essential travel because of the emergence of a number of variants of the novel coronavirus in countries like Britain, Brazil and South Africa even though many countries have started to roll out vaccination programs to tackle the novel coronavirus pandemic.
It has been almost a year that many companies in the aviation and holiday industries have gone with any significant amount of revenues because of the pandemic induced travel restrictions, the summer this year is a make-or-break period for many companies. Without any steady source of revenues, additional funds will be required by many companies after they exhaust all their cash reserves.
For example, a 2 billion pound loss in 2020 was announced by Britain’s Heathrow Airport on Wednesday and reiterated that for the international travel sector to witness any form of recovery from the pandemic recession, the digital health checks were now absolutely vital.
By the end of March, a Covid-19 travel pass is planned to be launched by it, IATA also said on Wednesday. That new pass will make use of a digital system for test results and vaccine certificates which the body hopes will help in facilitating travel.
According to the IATA, it is also important to prepare the global aviation industry to return and rebound safely after a year or more of disruption and the governments have an important role to play in that. In the act of preparing airlines to reconnect people and economies, governments need opt work closely with the industry for development of the benchmarks and plans that can ensure that there is an orderly and timely restart, the global aviation body said.
“The UK has set a good example. Earlier this week 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 as a best practice for working with industry,” said de Juniac, the IATA’s Director General and Chief Executive Officer.
(Adapted from Reuters.com & MoneyControl.com)