MIAMI – European carriers face a potential revenue loss of US$76bn and passenger demand 46% below normal, putting at risk about 5.6 million jobs and $378bn in GDP supported by air transport.
In light of this situation, the International Air Transport Association (IATA) reiterated its call last Thursday for urgent action from European governments to provide financial relief for airlines.
Some of the impacts at the national level include:
- United Kingdom
- 113.5mn fewer passengers resulting in a $21.7bn revenue loss, risking almost 402,000 jobs and around $32.7bn in contribution to the UK economy.
- 93.7mn fewer passengers resulting in a $13bn revenue loss, risking 750,000 jobs and $49.4bn in contribution to Spain’s economy.
- 84.4mn fewer passengers resulting in a $15bn revenue loss, risking 400,000 jobs and $28bn in contribution to Germany’s economy.
- 67.7mn fewer passengers resulting in a $9.5bn revenue loss, risking 256,000 jobs and $67.4bn in contribution to Italy’s economy.
- 65mn fewer passengers resulting in a $12bn revenue loss, risking 318,000 jobs and $28.5bn in contribution to France’s economy.
To minimize the subsequent damage across the European economy, IATA advises in a press release that it is vital that governments step up their efforts to aid the industry.
Some European governments have already acted, including Norway, Sweden, Finland, Spain, and Italy. But more help is needed. IATA is calling for a combination of:
- direct financial support,
- loans, loan guarantees, and support for the corporate bond market
- tax relief.
IATA’s plea for financial relief
Rafael Schvartzman, IATA’s Regional Vice President for Europe, stated that the air transport industry was an economic engine, supporting 12.2 million jobs across Europe and $823 billion in GDP, adding that every job created in the aviation industry supports another 24 jobs in the wider economy.
Schvartzman went on to explain that keeping airlines financially viable during the present lockdown would help preserve jobs, maintain essential connections to repatriate citizens, and carry life-saving air cargo supplies.
The vice president added that the financial relief would “avoid broad economic damage by ensuring that airlines can rapidly scale-up operations when travel restrictions are lifted, jump-starting the European and global economies.”
In addition to financial support, IATA called for regulators to provide relief measures regarding the following key priorities:
- An urgent temporary amendment to the EU261 passenger rights regulation, stating that short-term flexibility is needed immediately.
- Permitting the use of vouchers instead of refunds, as has been allowed for some tour operators, would give airlines breathing space to repair cash flows.
- Providing a package of measures to ensure air cargo operations, including fast track procedures to obtain overflight and landing permits, exempting flight crew members from 14-day quarantine.
- Removing economic impediments (overflight charges, parking fees, and slot restrictions).
Schvartzman did congratulate the European Council for insisting on a full-season waiver to the slot use rule, as this would enable airlines and airports greater flexibility, and greater certainty for next summer. However, he called for amendments on the regulatory front to keep air cargo moving.
Revenue losses in numbers
|Nation||Revenue impact (US$, billions)||Passenger demand impact (Origin-Destination volumes, millions)||Potential jobs impact||Potential GDP impact (US$, billions)|
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