KUALA LUMPUR: The Covid-19 crisis will see airline passenger revenues dropping by $314 billion in 2020, a 55 per cent decline compared to 2019, according to the International Air Transport Association (IATA) in its latest updated analysis on the sector.
On March 24, IATA estimated the sector will lose $252 billion in revenues (- 44 per cent versus 2019) if severe travel restrictions lasted for three months.
The updated figures reflect a significant deepening of the crisis since then and severe domestic restrictions lasting three months.
“The data also reflects by some restrictions on international travel extending beyond the initial three months as well as worldwide severe impact, including Africa and Latin America (which had a small presence of the disease and were expected to be less impacted in the March analysis),” IATA said.
On the full-year passenger demand (domestic and international), the global body expects it to be down 48 per cent compared to 2019 due to overall economic developments and travel restrictions.
IATA’s director general and chief executive officer, Alexandre de Juniac said more than half of passenger revenues will disappear, which would be a $314 billion hit.
Several governments have stepped up with new or expanded financial relief measures but the situation remains critical.
“Airlines could burn through $61 billion of cash reserves in the Q2 alone. That puts at risk 25 million jobs dependent on aviation.
“And without urgent relief, many airlines will not survive to lead the economic recovery,” he said.
Governments said de Juniac must include aviation in their stabilisation packages as airlines are at the core of a value chain that supports some 65.5 million jobs worldwide.
Financial relief for airlines he said, should be a critical policy measure for governments in supporting airlines to keep vital supply chains working through the crisis.
“Every airline job saved will keep 24 more people employed and it will give airlines a fighting chance of being viable businesses that are ready to lead the recovery by connecting economies when the pandemic is contained.
“If airlines are not ready, the economic pain of Covid-19 will be unnecessarily prolonged,” said de Juniac. – Bernama