- Global Air Transport to Suffer $252bn in Damages
The International Air Transport Association (IATA) has said the expected damage to the global air transport due to the coronavirus pandemic has risen to $252 billion or 44 percent below the 2019’s revenue.
The association had previously estimated $113 billion revenue loss on March 5th, however, the association revised up its estimation to $252 billion citing more air restrictions, cancellation of flights and an increase in ticket refund.
“Owing to the severity of travel restrictions and the expected global recession, IATA now estimates that industry passenger revenues could plummet $252bn or 44 percent below 2019’s figure. This is in a scenario in which severe travel restrictions last for up to three months, followed by a gradual economic recovery later this year,” the association said.
Alexander de Junaic, the Director-General, IATA, said, “The airline industry faces its gravest crisis. Within a matter of a few weeks, our previous worst case scenario is looking better than our latest estimates. But without immediate government relief measures, there will not be an industry left standing.
“Airlines need $200bn in liquidity support simply to make it through. Some governments have already stepped forward, but many more need to follow suit.”
The association added that under the stated scenario, it assumed that several travel restrictions would be lifted after three months. Meaning, it could get worse without a credible solution warranting such a decision.
IATA said, “The recovery in travel demand later this year is weakened by the impact of global recession on jobs and confidence. Full-year passenger demand declines by 38 percent compared to 2019.
“Industry capacity (available seat kilometre or ASKs) in domestic and international markets declines 65 per cent during the second quarter ended 30 June compared to a year-ago period, but in this scenario recovers to a 10 per cent decline in the fourth quarter.”