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In its first briefing for 2021, IATA warned that the reversal of the nascent recovery and the stalling of international travel growth had set back recovery in 2021.

IATA chief economist Brian Pearce warned carriers would continue to burn cash for at least the next six months before a transition to cash generation towards the end of the year.

“If anything, the immediate future has got worse because of the impact of the virus, because of travel restrictions and because of what we know airlines are doing in cutting their schedules for the first few months of this year,’’ he said.

Pearce warned that many carriers may not be able to wait until the end of the year for stronger revenues.

“Larger airlines have built up substantial cash balances but many airlines have not been able to do so,’’ he said.

There was a relatively low number of airline failures in 2020 despite a catastrophic collapse in airline revenue and Pearce said few airlines would have been able to continue trading under current conditions in normal circumstances.

“It was really purely because governments have stepped in,’’ he said. “To date, we’ve counted aid of $197 billion dollars (and) that has kept airlines on life support.

“So we saw only about 40 or 50 airlines fail or be restructured under bankruptcy, which is a relatively small number.

”The challenge now is to make the restart of the industry economically viable because it’s still extremely challenging.”

The IATA economist said governments would still need to look carefully at the airlines serving and based in their countries as they grappled with conditions in the first half of the year.

“The next six months, except for those airlines who have raised a lot of cash, could see airlines fail before we see the vaccines make a significant difference to passenger revenues later this year,” he said.

IATA is sticking with its prediction that airline passenger levels will not recover to 2019 levels until 2023. Long-haul markets are expected to recover more slowly with revenue passenger kilometres reaching 2019 levels a year later.

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