The International Air Transport Association (IATA) is urging Asia-Pacific states to take urgent action to provide financial support to their airline industry impacted by the COVID-19 crisis, as is happening in other parts of the world.
Australia, New Zealand and Singapore have already announced a substantial package of measures to support their aviation industries.
Major Asia-Pacific states, however, have yet to act and could see passenger demand in 2020 reduced by between 34% to 44%.
Conrad Clifford, IATA’s regional vice president, Asia-Pacific, says, “Based on a scenario in which severe travel restrictions last for three months, the Asia-Pacific region as a whole will see passenger demand reduced by 37% this year, with a revenue loss of US$88 billion.
“While each country will see varying impact on passenger demand, the net result is the same – their airlines are fighting for survival, they are facing a liquidity crisis, and they will need financial relief urgently to sustain their businesses through this volatile situation.”
In its latest analysis, IATA expects airlines to post a net loss of US$39 billion during the second quarter ending 30 June 2020. That will be amplified by a US$35 billion liability for potential ticket refunds. Without relief, the industry’s cash position could deteriorate by US$61 billion in the second quarter.
“Governments need to ensure that airlines have sufficient cash flow to tide them over this period, by providing direct financial support, facilitating loans, loan guarantees, and support for the corporate bond market. Taxes, levies, and airport and aeronautical charges for the industry should also be fully or partially waived.
“It is critical that these countries still have a viable aviation sector to support the economic recovery, connect manufacturing hubs and support tourism when the COVID-19 crisis is over. They need to act now – and urgently – before it is too late,” added Clifford.