In olden days, it might have represented some up-front cash collection, but today, nearly every booking is paid by credit card, and I recently learned that credit card processing intermediaries withhold a huge chunk of cash from airlines (varies according to specific contract terms, I assume) until the revenue is earned in case they must pay refunds for airlines that stop operating in the interim. Therefore, airlines don't receive much cash benefit from bookings until the passengers fly.
The card companies are in a world of financial pain too. In most jurisdictions, whether they get repaid by their customer or not, ultimately they have to make the refund to the customer. However, there is a process where this can be dragged out, while waiting for the airline to approve the refund (in other words, the claim is justified). The card company also has to refund part of their revenue (commission), so understandable why both card companies and airlines are 'stretching' the refund process.
When refunds consistently exceed inflows from customers, the customer must obtain a bank guarantee and / or credit line to cover the refunds, and the value is many times the actual or average outflow. Not many financiers (none?) willing to underwrite refunds in the present environment.
In normal circumstances, the card companies simply debits the refunds from funds 'passing through', but it doesn't work when the funds flow is negative.
I'm not talking about lending losses from cardholders not paying their bills. I'm saying that booking using credit cards do not mean the airline has received all that cash. Unlike most other merchants, card issuers withhold settlement of cash to the airlines for credit card transactions until the flights are flown to protect the card issuer in case the airline goes under and they have to pay out refunds to their cardholders for chargebacks. Bookings do not equal cash to airlines nor do they equal revenue recognized by airlines.
I'm not talking about lending losses either.
The only reason card issuers withhold payments to merchants, is in respect to creditworthiness concerns. In the present environment, merchants (in this case airlines), have four choices - repay all the disputed transactions, cease accepting the card, obtain a bank guarantee or credit to the value required by the card issuer, or allow the card issuer to 'hold' funds. For most, the latter is the only option.
Call me cynical, but withholding funds from merchants, usefully assists card issuers liquidity, and creates a buffer if the merchant should fail.
Many new directors fail to look back through board minutes. If they did, they would understand in most jurisdictions becoming a merchant requires LLC's to obtain Board approval, and to minute the execution of the agreement. Why? So all directors are jointly and severally liable, and 'grips' new directors on appointment, and old on transactions until the date of departure (and disputed beyond). You can buy an extension to Directors Liability insurance for this risk, which in the current environment, insurers are now re-pricing and / or cancelling.