According to experts, Global airlines will only begin their recovery from the worse ever crisis they have faced at the end of the year.
Also, the industry’s trade group says that Any improvement will be for a period if a winter wave of Coronavirus arises.
More:
- Airlines turn to cargo for revenue as U.S. Senate approves aid packages
- Airlines slash international fares to beat coronavirus downturn
Many airlines across the world, even carriers with deep pockets, are facing an uphill battle to survive this period. According to the International Air Transport Association, the industry will have to spend $61 billion in cash this quarter to survive.
This is as a result of a 70% decrease in traffic and revenue.
Carriers across the globe are set to announce a collective loss of $39 billion for this quarter. The cause of this massive loss is because of many airplanes being grounded due to lockdown and travel restrictions.
Airlines Suffer Great Loss
According to the Director-General of the IATA, the amount of loss is unlike anything the industry has seen before.
The Director-General, Alexandre de Juniac, urged government throughout the world to speed up bailouts for many airlines expected to have a revenue loss of $252 billion.
Last week Friday, the US Congress approved legislation to authorize a $25 billion bailout package for airlines. Also, the legislation authorized $4 billion and $3 for cargo Carriers and airport contractors, respectively.
IATA expects the action from the government bailout and central bank to boost higher travel demand in the last quarter. This is after a massive second-quarter lockdown and weak revenue in the third.
In addition, IATA warned carriers that they would face additional short-term challenges, with many economies going into recession.
In his statement, de Juniac said that “everyone is eager to have cash and is running out of cash.”
According to the chief economist of IATA, Brian Pearce, the best-case scenario is to hope for a fourth-quarter growth and a healthy 2021. He said, “ we are not sure it is going to happen. It might take a longer time for us to get over issues with the virus.”
He added that ” we are looking into other scenarios in the event when the virus comes back.”
