The International Air Transport Association (IATA) expects the industry to turn cash positive this year but not until the fourth quarter with the rollout of vaccines gradually giving governments the confidence to reopen markets.
"We can see light at the end of the tunnel," said Chief Economist Brian Pearce. "But it is still some way away, and the situation is likely to get worse first."
While the industry saw some modest improvement in bookings after the vaccine announcement news in the fourth quarter of 2020, the trend was reversed towards the end of December and into the first few days of 2021.
"We've actually seen quite a sharp drop-off in bookings, which means that the immediate outlook looks pretty challenging," said Pearce citing the impact of spiking virus cases and imposition of further travel restrictions by governments across the world.
Bookings for the first quarter of 2021 are down 75 per cent, 82 per cent and 81 per cent year-on-year respectively for January, February and March.
At the same point of the fourth quarter of 2020 -- which Pearce said was already weak -- IATA figures show forward bookings were down 71 per cent, 81 per cent and 80 per cent year-on-year respectively for October, November and December.
The tough booking outlook comes as the aviation industry continues to experience a reversal of the traffic recovery trend that peaked in the northern hemisphere summer season last year.
In early January, the majority of international travel markets are showing very little change from the April 2020 lows, said Pearce adding that while performance of global financial markets suggests the pandemic is over, IATA disagrees.
( With inputs from ANI )
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