Carriers Bracing for Swift Monetary Depletion
article: Let's talk about the struggles faced by airline industries back in Q2 2020, shall we? The International Air Transport Association (IATA) didn't specifically focus on this period in their recent reports, but fleeting through the fog of the COVID-19 pandemic, we can safely say it was a financial hell for the aviation sector.
During those dark days, airlines were burning through cash like it was going out of style. The IATA reported that airlines internationally were losing billions every month just to keep afloat[1]. This massive cash burn led to a rapid depletion of their reserves, forcing carriers to tap into existing cash buffers, seek government support, and increase borrowings to stay afloat.
The impact on demand and revenues was devastating.全年需求和飞机乘客收入下降
- As a result, the airline industry's reliance on external finance significantly increased, with many turning to banks for loans to sustain their operations in the transportation sector.
- Meanwhile, the finance industry pondered on the long-term viability of airline businesses, scrutinizing their financial health and capital structure, as the aviation sector struggled with setbacks in Q2 2020.
