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Airlines Face more Turbulence Before Vaccine Relief

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For a year expected to mark a turning point for pandemicstricken European airlines, 2021 is off to a rough start.

A resurgence of COVID19 lockdowns has killed off a fragile bookings upturn, executives and analysts said, just as airlines were hoping the promise of vaccines would put the worst of the crisis behind them and set the stage for a summer rebound.

New outbreaks and travel restrictions some designed to curb the spread of a highly infectious virus variant detected in Britain have hit forward bookings that are usually relied upon to bring in vital cash during the thin winter months.

Global airline industry body IATA believes a return to positive cash flow might not arrive before the end of the year, Chief Economist Brian Pearce said.

Meanwhile the cash burn is going to continue and may even in increase in Europe, Pearce told an online conference on Wednesday.

Some carriers may yet run out of cash, he added. For bailedout airlines like Air FranceKLM and Lufthansa, a longer slump increases both debt and the likelihood more support will be needed.

Europe faces some of the worst setbacks although hitherto buoyant Chinese and Russian domestic bookings have also been weakened by new restrictions.

IntraEuropean bookings for the first half of the year stand at 22 of their level 12 months ago, Olivier Ponti of aviation data specialist ForwardKeys said. That compares with 36 for U.S. domestic bookings and 48 for flights within China.

CARNAGE IN EUROPE

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