Vaccines will bring a recovery in air travel in the second half of this year but only to half the level of 2019 and some carriers will run out of cash before then, Iata has warned.

Iata chief economist Brian Pearce said “the immediate future has got worse” and warned the new variant of the virus in Europe has “cast doubt on the Easter season”. But he suggested the summer season “could still be successful”.

Speaking on a CAPA Centre for Aviation webinar, Pearce said: “We have a very difficult three to six months ahead.

“Vaccines have transformed the outlook but the timing of vulnerable groups being immunised will vary by country.

“The production of vaccines could allow vulnerable groups in North America and Europe to be vaccinated by the second quarter of the year. [But] it is not going to be the same in developing markets so a full recovery is going to take some time.”

He added: “The immediate prospects are not good.”

Pearce reported forward bookings deteriorated through the fourth quarter of last year and said: “We expect some further deterioration through the first quarter of this year.

“The outlook for the end of the year is reasonable because of the vaccines. The second half will feel much stronger.

“Iata’s forecast is for a recovery through the year that will leave global traffic at 50% of the 2019 level. We’re taking about a multi-year recovery.”

Pearce said the number of airline failures had been limited so far “because governments in most countries have stepped in. They have provided almost $200 billion in cash in various forms. The trouble is this has left [airlines] shackled with debt.

“The industry has raised net debt by 50% to $650 billion over the past year. To a large extent it is unsustainable.”

He warned: “Some airlines’ cash may run out before the vaccine boost in the second half of the year.”

For now, Pearce said, the partial recovery in Europe last summer had “completely stalled”, noting: “Control of the virus was much more difficult than expected outside Asia.”

He added: “Recovery does also depend on the outlook of consumers and so far we’ve not seen much of an upturn in travel website searches.

“There is evidence of pent-up demand to visit friends and relatives. When the UK removed the UAE from the requirement to quarantine in November we saw bookings surge.”

UK bookings to the UAE had subsequently fallen because of “what is happening in the UK”, he said.

Speaking on an Iata briefing, Pearce argued: “Air travel is extremely sensitive to the ability to control the virus.

“We did see some modest improvement in bookings following the vaccine announcements, but a drop-off since. Forward bookings for February and March are more than 80% down year on year and the situation is likely to get worse.

“In Europe, the new variant [of the virus] has hit bookings. It has certainly cast doubt on the Easter season. We’re now dependent on the speed at which governments roll out vaccination.

“Some estimates suggest the vulnerable should be vaccinated in Europe by the second quarter. So the summer season could still be successful but it depends on the roll-out of the vaccine.

“Vaccination programmes are ramping up quickly in some advanced countries and they should be in a position to relax travel restrictions certainly by next year. [But] that is not the case across the world.

“Also, consumers will take time to return to the level of behaviour of before.”