Airlines’ debts are expected to rise by $ 120 billion this year due to the corona crisis. That is what the international aviation interest group expects IATA.

Airlines saw their cash emptying rapidly due to the crisis, after travel restrictions made it almost impossible to fly worldwide. Governments came to the rescue with aid measures worth $ 123 billion. Of that, $ 67 billion consisted of government loans and credit guarantees, and tax deductions. Another $ 52 billion in credit came from commercial parties.

Total airline debts will reach $ 550 billion this year, IATA estimates. That is 28 percent more than last year. The higher debt burden makes recovery in the sector hard hit by the corona crisis more difficult, warns IATA chief Alexandre de Juniac.

“State aid helps the sector survive. The next challenge is to prevent airlines from falling under the debt that this aid creates,” said De Juniac.

He therefore advocates that new aid packages from the government should focus primarily on strengthening equity.

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