IATA: Many airlines may 'struggle to survive the weak winter months'

IATA reported (18-Sep-2020) the median airline has "just over six months" worth of cash balances and near cash assets, based on the cash position of airlines reporting 2Q2020 financial results and assuming the rate of cash burn in 2Q2020 continues. IATA stated cash burn "was probably at its worst" in 2Q2020, but noted "weak cash flows" are expected in 4Q2020 and 1Q2021. The association noted most airlines have received cash balance support in the form of government aid, which totalled USD161 billion worldwide by early Sep-2020, but government aid is starting to be withdrawn. A smaller number of airlines also raised cash by issuing debt or equity and selling assets. As a result, IATA reported there is "a large group of airlines" with large cash balances that will "last a long time", but most airlines do not have this buffer. The association concluded: "Many airlines in the industry remain in a fragile financial state and will struggle to survive the weak winter months, unless we see a faster pace of recovery in air travel". [more - original PR]