MIAMI – IATA warns that airlines will need US$70-80bn in aid to survive the coronavirus crisis or another half again of the amount already received from governments.
Speaking about the government aid already given to airlines worldwide, Alexandre de Juniac, director-general of the International Air Transport Association said on Friday at the Paris Air Forum, hosted by newspaper La Tribune, “We are extremely grateful to them for having injected US$160bn into the sector.”
“For the coming months, the industry’s needs are evaluated at US$70-80bn in additional aid,” de Juniac said. “Otherwise some airlines will not survive.” While vaccine breakthroughs and subsequent rollout provide hope, airlines say a return to mass travel remains several months away. Some would struggle to make it through the northern hemisphere winter, even in normal times, when profits are thin.
In the meantime, while shares of airlines and travel companies rose soon after Pfizers announced its experimental vaccine was 90% effective, a new wave of COVID-19 infections and subsequent travel restrictions have further diminished the economic outlook for a market that IATA has estimated will lose US$87bn.
A Dire Prediction for the Industry
As quoted in a Gulf News report, de Juniac predicts, “It’s quite probable that we will be looking at bigger losses than the figures we announced,” adding that the full-year deficit would likely approach US$100bn.
With a return to pre-crisis traffic levels only in 2024 and passenger numbers already down 30% next year, IATA has forecast a painfully slow recovery.
That too could prove optimistic, de Juniac warned. “We estimate that air traffic will be at 33% of its 2019 level at the end of 2020 and then, we hope, 50-60% at the end of 2021.”
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