Global airlines are expected to burn through as much as $95bn more cash this year after tighter coronavirus restrictions put the brakes on recovery, according to an updated forecast.

The downgraded outlook from industry body IATA points to another year of struggle for the sector after a grim 2020 which is expected to have cost as much as $150bn.

However the organisation is planning for a recovery in travel to begin later this year as vaccines are rolled out, and plans to launch a digital travel pass next month.

The forecast came hours after Heathrow reported a loss of £2bn for 2020 as passenger numbers slumped to the lowest level since the 1970s.

Airlines and airports were battered by severe travel restrictions last year with demand falling by 66% compared with 2019, the biggest slump in aviation history, according to IATA figures released earlier this month.

They suffered a further setback when the emergence of new COVID-19 variants meant these restrictions were tightened again.

That has prompted IATA to pencil in a gloomier outlook for 2021, with a cash burn of $75bn-$95bn expected, up from a previously forecast $48bn.

Even in its most optimistic scenario, with travel restrictions gradually lifted as vaccines are rolled out in developed countries ahead of the peak summer season, it would only be enough to fuel “tepid” demand at 38% of 2019 levels.

If restrictions remain tight, it could be even lower.

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The summer season could prove critical for airlines already on their knees after last year’s struggles.

IATA chief executive Alexandre de Juniac said: “2021 is shaping up to be a much tougher year than previously expected.

“More emergency relief from governments will be needed.

“A functioning airline industry can eventually energise the economic recovery from COVID-19.

“But that won’t happen if there are massive failures before the crisis ends.

“If governments are unable to open their borders, we will need them to open their wallets with financial relief to keep airlines viable.”

Mr de Juniac said the UK had “set a good example” by laying out its roadmap for reopening this week, giving airlines a framework to restart even if they need to adjust it later – and prompting a spike in holiday bookings.

IATA said its travel pass, which will formally launch at the end of March, would help to facilitate travel by putting coronavirus test results and vaccine certificates in one digital format, speeding up check-in.

It said the pass would “enable travellers to securely control their health data and share it with relevant authorities”.

Air New Zealand, Etihad, Emirates and Singapore Airlines are among the carriers that have carried out or committed to trials with the pass, IATA said.

The organisation said it was vital that countries start issuing digital vaccine credentials in order for international travel to take off.

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