IATA gave an update on Tuesday on the impact of the COVID-19 crisis on the global aviation industry, with specific analysis on the industry’s cash burn.
CAPE TOWN – The International Air Transport Association (IATA) on Tuesday said it was time to ask governments to take extra measures to replace or extend support to the airline industry as the COVID-19 pandemic continued to have a significant financial impact on the sector.
IATA gave an update on the impact of the COVID-19 crisis on the global aviation industry, with specific analysis on the industry’s cash burn.
Its director-general and CEO, Alexandre de Juniac, said for the second half of the year they expected, on average, for airlines to burn through cash at about $300,000 per minute for a total of $77 billion.
He said the potential for failures and job losses in the coming months were enormous.
“Today I want to emphasise that this is not just an airline problem. We know that our airport and air navigation service partners are also struggling.
“They suffer from the same lack of demand that airlines do. And increasing their unit charges – passing the costs to other part of the value chain – to cover the gap is not an option. Remember, at the end of the value chain are consumers and they are price sensitive. Already two thirds of travelers say that they will postpone travel until their personal financial situation stabilises. Anything that makes travel more expensive in this environment will only delay the recovery and put jobs at risk,” De Juniac said in a statement.
De Juniac added that governments should be actively involved in supporting the entire sector’s finances through this unimaginably difficult time.
“My point today is that the enormity of what is happening to aviation has consequences far beyond the industry itself. And the means for financial sustainability in this long and deep crisis is far beyond what the industry is capable of ensuring by itself,” he said.
“Governments must be actively involved in supporting the entire sector’s finances through this unimaginably difficult time. And they should do it knowing that 10% of global economic activity is related to travel and tourism. That depends on connectivity. So supporting the industry in these challenging times is an investment worth making.”