25000 million for Europe's Airlines for support during pandemic

Europe’s airlines have received state financial support amounting to some 25,000 million euros. Since the start of the coronavirus crisis.

25000 million for Europe’s Airlines: According to the Scope Ratings data collected by Europa Press, this huge injection has been key to avoiding a larger liquidity crisis. The report, which has been led by analyst Werner Stäblein, warns that deleveraging after the Covid-19 crisis will be a challenge for the aviation industry.

The airline industry has a poor track record of generating free operating cash flow. An example is the case of three of the major airline groups within Europe. Such as Lufthansa, Air France-KLM and IAG. Their combined revenue is €90 billion (in pre-crisis times). However, operating free cash flow before the pandemic was only €2.5 billion, demonstrating high margins and high investment.

25000 million for Europe’s Airlines for support during pandemic

For the remainder of 2020, free operating cash flows for the first half of the year suggest that full-year cash burn may be less severe than anticipated. At the worst moment of the health crisis. However, everything will depend on the levels of reimbursement. Additionally temporary agreements with workers to reduce costs and the evolution of travel demand.


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