Fitch: Global airline sector to improve in 2021

Fitch: Global airline sector to improve in 2021
  • Clock-gray 10:35
  • calendar-gray 10 December 2020

Fitch Ratings expects operating conditions to improve for the global airline sector in 2021, but only relative to the unprecedented downturn in 2020, APA-Economics reports citing the Agency.

Spiking coronavirus cases in various regions and inconsistent travel restrictions will keep airline traffic low at least through the first part of 2021, with limited improvement expected relative to levels in 3Q20 and 4Q20. Recent positive news about vaccine development along with pent-up leisure demand may drive a more robust rebound in the 2H21.

Nearly all airline ratings remain under pressure as traffic remains severely depressed. Fitch expects more airline bankruptcies in 2021, particularly among smaller and less well-capitalized airlines. Modestly higher traffic and cost-cutting efforts will help stem cash burn compared with 2020. However, the combination of higher debt and prolonged weakness in operating profits will drive weak credit metrics for the sector at least over the next 18-24 months.

 
 

Mirsaid İbrahimzade

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