NEW DELHI: The International Air Transport Association (IATA) has warned airlines globally may burn through $61 billion of their cash reserves during the second quarter ending June 30, 2020, while posting a quarterly net loss of $39 billion.
Airlines across the world, IATA added, are faced with refunding sold but unused tickets as a result of massive cancellations resulting from government-imposed restrictions on travel. The second quarter liability for these is $35 billion.
This dire cash burn estimation, that could mean several airlines folding up, is based on a scenario where severe travel restrictions last for three months.
In this scenario, full-year demand falls by 38% and full-year passenger revenues drop by $252 billion compared to 2019. The fall in demand would be the deepest in the second quarter, with a 71% drop.
