US airlines: will tests jump-start demand to slash cash burn?
Airlines in the US are bracing for what could shape up to be one of the worst winters in the industry’s history. The country’s airlines continue to temper capacity as overall demand, while showing some slight improvement, remains solidly depressed.
The near term goal for US airlines and operators worldwide is achieving a break-even cash burn, but IATA does not believe that will occur on a global level until 2022. In the meantime, airlines are working to jump-start demand, a key element to reaching positive cash flow, through the roll-out of COVID-19 testing in order to boost traveller confidence.
Obviously, it will take time to determine how effective the testing is in pushing the needle on demand, but there are signs surfacing that support the theory that pent-up demand exists.
But critically, there is no guarantee that the desire to travel will materialise into firm bookings.
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