THE International Air Transport Association (IATA) urged the governments of the Philippines and other countries in Asia-Pacific to provide emergency support for airlines fighting for survival due to dramatic loss of air travel demand in combat for the spread of coronavirus disease 2019 (COVID-19).
IATA wrote the heads of government of 18 states in Asia Pacific include Bangladesh, India, Japan, Malaysia, Pakistan, Philippines, Republic of Korea, Thailand and Vietnam to appeal for emergency support to airlines.
“Airlines are fighting for survival in every corner of the world. Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business. For airlines, it’s apocalypse now. And there is a small and shrinking window for governments to provide a lifeline of financial support to prevent a liquidity crisis from shuttering the industry,” said Alexandre de Juniac, IATA director-general and chief executive officer.
In a matter of days, the crisis facing airlines worsened dramatically. “We are 100 percent behind governments in supporting measures to slow the spread of COVID-19. But we need them to understand that without urgent relief, many airlines will not be around to lead the recovery stage. Failure to act now will make this crisis longer and more painful. Some 2.7 million airline jobs are at risk. And each of those jobs supports a further 24 in the travel and tourism value chain. Some governments are already responding to our urgent calls, but not enough to make up the $200 billion needed,” said De Juniac.
IATA is proposing a number of options for governments to consider: direct financial support to passenger and cargo carriers, loan guarantees and support for the corporate bond market by the government and tax relief through rebates on payroll taxes paid 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.
IATA estimates the COVID-19 crisis will reduce passenger demand in Asia-Pacific by 37 percent this year compared to 2019, with a revenue loss of $88 billion. This is based on a scenario where severe restrictions on travel are lifted after three months, followed by gradual recovery.
“There are over 30 million jobs supported by the aviation industry that are at stake. Also at risk is the aviation connectivity that is needed to support supply chains, the flow of essential goods and medical supplies, as well as repatriation flights to bring home citizen stranded overseas,” said Conrad Clifford, IATA regional vice president for Asia Pacific.
“And the country will need a viable aviation sector to support the economic recovery of the country, connect manufacturing hubs and support tourism when we get through the COVID-19 crisis.” Clifford added.
IATA represents some 290 airlines comprising 82 percent of global air traffic.
In the Philippines, the Department of Transportation has proposed to defer the payment for take-off, landing, and parking fees of local airlines to cushion the impact of COVID-19.
Philippine Airlines, Cebu Pacific and AirAsia Philippines have announced the suspension of domestic and international flights.
