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Thursday, February 25, 2021

Airline industry to lose $95 billion, IATA mulls digital travel pass

Annual cash burn for airlines is pegged between $75 billion and $95 billion.

and • February 25, 2021

The International Air Transport Association says the air travel industry has been weakened as governments continue to tighten travel rules in light of the COVID-19 pandemic and new virus’ variants.

The body said it was preparing for recovery later this year and would launch a digital travel pass in March.

The Director General, Alexandre de Juniac, disclosed this in his remarks at a press briefing on Wednesday.

Mr. Juniac added that the industry would continue to burn cash this year. Its forecast for total annual cash burn for airlines is pegged between $75 billion and $95 billion, a feat he said the industry would be able to withstand without government relief.

“We need to plan for the recovery,” Mr. Juniac said, “We will need a way to digitally manage health credentials, and we need a secure global standard to record test results and vaccinations.”

The travel pass, which will formally launch at the end of March, will facilitate travel by putting COVID-19 test results and vaccine certificates in one digital format, speeding up check-in processes.

A list of airlines such as Air New Zealand, Copa Airlines, Etihad Airways, Emirates, Qatar Airways, Malaysia Airlines, RwandAir, and Singapore Airline have started their trials with IATA Travel Pass.

A new global report by IATA revealed that the airline industry would remain cash negative throughout 2021.

The association’s November analysis indicated that airlines would turn cash positive in the fourth quarter of 2021.

It, however, admitted on Wednesday, “It is already clear that the first half of 2021 will be worse than earlier anticipated. This is because governments have tightened travel restrictions in response to new COVID-19 variants. Forward bookings for summer (July-August) are currently 78 percent below levels in February 2019 (comparisons to 2020 are distorted owing to COVID-19 impacts).”

IATA detailed that 2021 will prove “much tougher than previously expected with the government tightening border and restriction.”

Mr. Juniac urged the government to provide more emergency relief.

“A functioning airline industry can eventually energise the economic recovery from COVID-19. But that won’t happen if there are massive failures before the crisis ends. If governments are unable to open their borders, we will need them to open their wallets with financial relief to keep airlines viable,” he explained.

On health management, Mr. Junaic noted that the association’s travel pass would enable travellers to securely control their health data and share it with relevant authorities.

“The IATA Travel App will help to set the bar very high for managing health credentials, protecting against fraud, and enabling a convenient travel process. While there is a choice in the market for solutions, there should be no compromise on the fundamentals, or we risk failing systems, disappointed governments and travellers, and a delayed restart,” he added.



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