IATA chief sees airlines ‘more cautious’ in post-pandemic networks

A focus on tackling the mounting debt burden is likely to result in airlines adopting a more cautious approach to building back their networks post-pandemic, believes new IATA DG Willie Walsh. Industry debt levels have risen sharply as airlines took action to bridge the revenue gap caused by the sharp fall in air travel during the pandemic. At the end of 2020, IATA estimated that airline industry debt levels had increased by more than $220b, to $651b – a figure that will have increased as carriers continue to burn cash while air travel markets remain largely closed. Walsh said increased debt levels will have an impact on the structure of the industry. “It will certainly cause airlines to be more cautious in terms of how they rebuild their networks, because without question there will be parts of the global network that wont’ be sustainable financially,” he says. “So people won’t be prepared to take the risk in the short-term, because there will be a focus on rebuilding and correcting the balance sheets of airlines that have been significantly stressed. The debt burden airlines have taken on – and continue to take on – is massive. Walsh adds: “It will take time to correct that and it has impacted on every airline, nobody has escaped this because pretty much nobody is flying where they thought they would be. So I think the industry will be a little more cautious as we rebuild.”<br/>