Calling upon governments worldwide to continue supporting the aviation industry, the International Air Transport Association (IATA) has warned that airlines would burn through approximately US$77 billion in cash in the second half of 2020.
With travel demand still low, carriers will continue to burn cash in 2021 at a cash burn-through rate of between US$5 billion and US$6 billion per month, it has added.
According to the IATA, government support is imperative, especially in the northern hemisphere where the traditionally slower winter season looms. So far, governments globally have given US$160 billion to the industry in the form of tax relief including fuel taxes, corporate tax relief, direct aid and wage subsidies.
Governments worldwide should continue supporting the industry as “the crisis is deeper and longer than any of us could have imagined,” said Alexandre de Juniac, IATA’s Director General and CEO. “Today we must ring the alarm bell again. If these support programs are not replaced or extended, the consequences for an already hobbled industry will be dire. Increasing the cost of travel at this sensitive time will delay a return to travel and keep jobs at risk.”
According to the Air Transport Action Group, the downturn following the COVID-19 pandemic and the slow recovery threatens 4.8 million jobs across the entire aviation sector. The global impact is 46 million potential job losses, with US$1.8 trillion dollars of economic activity at risk.
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