Debt-hit airlines may struggle to meet demand ramp-up: Walsh

IATA DG Willie Walsh believes a more cautious approach to network expansion from airlines battling to restore balance sheets ravaged by the crisis may mean capacity falls short of demand as travel restrictions are lifted. While passenger traffic figures for May issued by IATA today showed only a small improvement over April date - traffic as measured in RPKs was down 63% on 2019 levels rather than the 65% reduction in April - there has been some reopening of travel markets since June and growing optimism for the second half. Walsh said: ”I think the evidence in terms of airline schedules supports the view that airlines certainly believe that demand is increasing, and as we are seeing evidence of restrictions being removed in certain countries, there is a greater willingness to travel.” He also points to signs that even where restrictions remain in place, people are less discouraged from travel if there is no requirement to quarantine at their destination, even if they may have to on their return home. ”We are still optimistic but cautious about the second half,” Walsh says. But he believes a legacy of the extra debt airlines have had to take on during the crisis - and with much of the industry still burning cash - is carriers are likely to adopt a more cautious approach to returning capacity.<br/>