IATA urges APAC states to support airlines over COVID-19 impact
The International Air Transport Association (IATA) urges Asia-Pacific states to crucially provide financial support with their airline industries impacted by the coronavirus pandemic.
Major Asia-Pacific states could see passenger demand in 2020 reduced by 34 % to 44 per cent, IATA said in its latest report. That is predicated on a scenario where serious restrictions on travel are lifted after 90 days, followed by gradual recovery.
Bangladesh could see passenger demand reduced by 37 % which accounts for 4,218,000 passengers. IATA also explained the country could visit a revenue lack of USD 842 billion and 47,200 potential jobs in the airline industry could possibly be at risk.
However, Cambodia (-34 %), Vietnam (-34 %) and the Philippines (-36 %) will be on the low end of the number of impact, while Thailand (-40 %), Pakistan (-40 per cent), Republic of Korea (-40 per cent) and Sri Lanka (-44 %) will be largely affected.
“Predicated on a scenario where extreme travel restrictions last for 90 days, the Asia-Pacific region all together will dsicover passenger demand reduced by 37 % this year, with a revenue lack of USD 88 billion. Whilst every country will dsicover varying effect on passenger demand, the web result may be the same - their airlines are fighting for survival, they are facing a liquidity crisis, and they'll need financial relief urgently to sustain their businesses through this volatile situation,” said Conrad Clifford, Regional Vice President, Asia-Pacific, IATA.
In its latest analysis, IATA expects airlines to create a net lack of USD 39 billion through the second quarter ending June 30. The impact of this on cash burn will be amplified by a USD 35 billion liability for potential ticket refunds. Without relief, the industry’s cash position could deteriorate by USD 61 billion in the next quarter
Australia, New Zealand and Singapore have announced a substantial package of measures to support their aviation industry. “But others in your community, including India, Indonesia, Japan, Malaysia, the Philippines, Republic of Korea, Sri Lanka and Thailand, have yet to take decisive and effective action. Jobs along with the GDP supported by the industry are at risk,” said Clifford.
“Governments need to ensure that airlines have sufficient cashflow to tide them over this era, by giving direct financial support, facilitating loans, loan guarantees, and support for the organization bond market. Taxes, levies, and airport and aeronautical costs for the industry also needs to be fully or partially waived. It is critical that these countries still have a viable aviation sector to aid the economic recovery, hook up manufacturing hubs and support tourism when the COVID-19 crisis has ended. They have to act now - and urgently - before it really is too late,” concluded Clifford.
