Next year it will not be good either. Because the demand for air travel is only slowly recovering after previous travel restrictions, 5 billion to 6 billion dollars is still flowing out of the cash every month. Black numbers will not be written until 2022, expects the industry club.
In the second quarter of 2020, when many countries went into lockdown, airlines already burned $ 51 billion despite significant budget cuts. Despite easing, the so-called ‘cash burn’ also continued in the summer months, according to a report from IATA.
KLM
A major airline like British Airways is short of £ 20 million (€ 21.8 million) every month, RTL Z reported earlier. Mayday, and that also applies to KLM, despite millions in wage support and the substantial support program every day 10 million euros loses.
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In the summer there was a bit more flying, but much less than normal. That’s a problem, because many airlines build up fat on the bones in the summer, for the less busy winter months. These companies are now entering the low season without buffers, warns IATA CEO Alexandre de Juniac.
Additional support
In order not to collapse airlines, additional support is needed, according to IATA. Governments have previously come to the aid of airlines with wage subsidies, tax relief or credit. That’s how KLM billions of support from the Dutch government.
“We are grateful for this support. But the crisis is deeper and longer than we could ever have imagined. And the first support programs are running out,” De Juniac is preparing for further assistance. “If the programs are not replaced or expanded, the consequences for an already hindered industry will be dire.”
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Prices airline tickets
Raising the price of airline tickets is not an option, according to the CEO, because travelers will stay away even faster. The aviation lobby now mainly alludes to financial aid from the government, which does not increase the debt burden any further.
This would mainly result in capital investments whereby governments buy shares from airlines. KLM alluded to this before. This could have political consequences, because both the French and the Dutch state have an interest of approximately 14 percent in the aviation group to defend national interests. Full or partial nationalization is therefore a difficult point.
Ryanair
Incidentally, not every airline receives state aid. For example, Ryanair, which also flies from the Netherlands, has to do it on its own. That company lost 95 percent in the second quarter of the turnover, which fell to 125 million euros.
Costs could also be significantly reduced, by 85 percent. Despite this, there was a loss of 185 million euros, against a profit of 243 million euros in the same period last year.
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