IATA: Airlines expected to continue to burn cash through 2022 as revenues are likely to remain soft

IATA, via its Airlines Financial Monitor for Aug/Sep-2020, reported (20-Oct-2020) the following key 3Q2020 industry operational and financial highlights:

• Initial 3Q2020 financial results show that airlines continued to suffer from subdued travel demand. Based on the results available so far, the cash burn rate slowed in 3Q2020 compared to 2Q2020 with the help of cost cutting measures and robust cargo revenues. However, airlines are expected to continue to burn cash through 2022 as revenues are likely to remain soft;
• The global airline share price index declined in Sep-2020 after a short-lived rebound in Aug-2020. Concerns regarding a second wave of COVID-19 cases and the potential for a new round of travel restrictions were the main reasons behind the sell-off;
• Oil and jet fuel prices have ticked up recently on hurricane-related supply disruptions but the overall outlook for global oil demand in the near term is still very fragile;
• Both passenger and cargo demand continued to recover in Aug-2020. However, the pace of recovery remains gradual and passenger demand continues to lag the rise in seat capacity;
• Global base passenger yields declined in August as airlines sought to improve weak travel demand with price stimulation in the economy cabin. [more - original PR]