AviationUrgent help needed to protect jobs and GDP, says association’s regional VP

IATA: Asia Pacific airlines are ‘fighting for survival’

By
|
The Asia-Pacific region will see passenger demand reduced by 37% this year, IATA predicts.
The Asia-Pacific region will see passenger demand reduced by 37% this year, IATA predicts. Photo Credit: GrashAlex/ iStock / Getty Images Plus

SINGAPORE - The International Air Transport Association (IATA) has delivered its strongest warning yet that many Asia Pacific airlines face a grim outlook unless they receive urgent government support to mitigate the impact of COVID-19 on passenger numbers.

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,– Conrad Clifford, IATA’s regional vice president, Asia-Pacific

IATA said that Australia, New Zealand and Singapore have announced a substantial package of measures to support their aviation industry, while “others in the region, including India, Indonesia, Japan, Malaysia, the Philippines, Republic of Korea, Sri Lanka and Thailand, have yet to take decisive and effective action”.

“Jobs as well as the GDP supported by the industry are at risk,” said Conrad Clifford, IATA’s regional vice president, Asia-Pacific.

Major Asia-Pacific states could see passenger demand in 2020 reduced by between 34% to 44%. This is based on a scenario where severe restrictions on travel are lifted after three months, followed by gradual recovery, IATA said.

Cambodia (-34%), Vietnam (-34%) and the Philippines (-36%) will be on the lower end of the range, while Thailand (-40%), Pakistan (-40%), Republic of Korea (-40%) and Sri Lanka (-44%) will see the largest impact.

“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,” Mr Clifford added.

He said governments needed to ensure that airlines had 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,” said Mr Clifford.

JDS Travel News JDS Viewpoints JDS Africa/MI