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COVID 19: US airlines try to strike cash burn-liquidity balance

Premium Analysis

The COVID-19 pandemic continues to change businesses worldwide, and airlines have been forced to set aside their historical financial metrics in lieu of providing specifics regarding their efforts to preserve cash and stave off cash burn. 

In the US, American, Delta and United are working feverishly to reduce their cash burn, and to sustain or bolster their liquidity. All three airlines are seeking approval for government loans with certain conditions, but American seems the most eager to access loans through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, despite stipulations attached to the debt that could be deemed as unattractive. 

The major focus of those airlines and operators worldwide is weathering the crisis intact.

But the severity of the COVID-19 pandemic will raise questions over the longer term about the right levels of liquidity that airlines should aspire to achieve. 

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