Airlines need all the help they can get from governments.
GENEVA - The International Air Transport Association (IATA) has strongly urged the governments of the world to take fast action in light of the worsening conditions in the airline industry.
CEO, Alexandre de Juniac, said: "On March 5th we estimated that industry revenues could take a hit of up to US$113 billion as a result of what we thought then would be a worst-case scenario.
"We could not have foreseen the developments of the last days with massive restrictions on travel being put in place…and with no clear understanding how long they will remain in effect."
He added that governments have the financial means to avoid an industry calamity in three ways:
• Direct financial support for carriers to compensate for reduced revenues, and therefore support liquidity due to travel restrictions imposed as a result of COVID-19
• Loans, loan guarantees and support for the corporate bond market by governments or central banks, either directly to the airline or to commercial banks that may be reluctant to extend credit to airlines in the present situation in the absence of such a guarantee.
• Tax relief: Rebates and/or suspension on all employer imposed payroll taxes paid to date with an ongoing review for the rest of 2020, deferral or reduction in income taxes 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.
He added: "There is no one-size fits all solution. So, we will be writing to governments around the world to alert them to the dire situation of the industry and get them moving - in the circumstances of their country.
"Time is of the essence. Governments cannot take a wait-and-see approach. We have seen how dramatically the situation has deteriorated globally in a very short time. They must act now and decisively.
"Some of you may wonder why, given the broad economic impact of this crisis, governments should focus on airlines. It is because connectivity is crucial. The world will get through this crisis. And when it does it will need a functioning air transport sector. Without financial relief that is not guaranteed."
"In normal times, airlines transport about 35% of global trade. And every job in air transport supports another 24 in the travel and tourism value chain-nearly 70 million jobs. Prioritising air transport - helping airlines financially survive through these dark times-will position the world for the eventual recovery."