KUALA LUMPUR: The International Air Transport Association (IATA) estimates annual passenger revenues will fall by US$252bil if severe travel restrictions remain in place for three months.
IATA, which represents 290 airlines comprising 82% of global air traffic, issued the dire warning late Tuesday as countries put in place lockdowns and closed their borders due to escalating Covid-19 coronavirus pandemic.
Based on its latest analysis, IATA said the US$252bil decline represented a 44% fall compared to 2019.
“This is well-over double IATA’s previous analysis of a US$113bil revenue hit that was made before countries around the world introduced sweeping travel restrictions, ” it said.
In the statement, IATA also welcomed the support of those governments around the world that have provided financial relief to airlines and urged other governments to follow suit before more damage is done.
IATA director general and CEO Alexandre de Juniac said airlines are fighting for survival in every corner of the world.
“Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business.
“For airlines, it’s apocalypse now. And there is a small and shrinking window for governments to provide a lifeline of financial support to prevent a liquidity crisis from shuttering the industry, ” he said.
de Juniac said it did not seem possible, but in a matter of days, the crisis facing airlines worsened dramatically.
He said without urgent relief, many airlines will not be around to lead the recovery stage. Failure to act now will make this crisis longer and more painful.
He pointed out 2.7 million airline jobs are at risk. And each of those jobs supports a further 24 in the travel and tourism value chain.
“Some governments are already responding to our urgent calls, but not enough to make up the US$200bil needed, ” said de Juniac.
IATA is calling for:
1. Direct financial support to passenger and cargo carriers to compensate for reduced revenues and liquidity attributable to travel restrictions imposed as a result of Covid-19;
2. Loans, loan guarantees and support for the corporate bond market by the government or central banks. The corporate bond market is a vital source of finance, but the eligibility of corporate bonds for central bank support needs to be extended and guaranteed by governments to provide access for a wider range of companies.
3. Tax relief: Rebates on payroll taxes paid to date in 2020 and/or an extension of payment terms for the rest of 2020, along with a temporary waiver of ticket taxes and other government-imposed levies.
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