IATA: Industry cannot cut costs enough to avoid bankruptcies and preserve jobs in 2021

IATA presented (27-Oct-2020) new analysis showing that the airline industry cannot slash costs sufficiently to neutralise severe cash burn to avoid bankruptcies and preserve jobs in 2021. IATA expects 2021 airline revenues will be down 46% compared to 2019. Costs have not fallen as fast as revenues, with around 50% of airlines' costs either fixed or semi-fixed in the short term. Airlines managed a 48% reduction in cost in 2Q2020, compared to a 73% decline in operating revenues, based on a sample of 76 airlines. Looking forward to 2021, IATA estimates that to achieve a breakeven operating result and neutralise cash burn, unit costs will need to fall by 30% compared to average CASK for 2020. The association reiterated its call for government relief measures to sustain airlines financially and avoid massive employment terminations. IATA also called for pre-flight COVID-19 testing to open borders and enable travel without quarantine. [more - original PR]