IATA warns: the hole in the budget of European companies is 86 billion dollars
The new financial and social estimates presented by IATA (International Air Transport Association) are dramatic. The International Air Transport Association has come up with new evidence showing the deepening economic crisis among European airlines. IATA has called for urgent government action to preserve air services.
The IATA analysis shows that in 2020, the potential revenue loss of airlines has increased to $ 89 billion, and the number of passengers is expected to fall by 55% below 2019.
The new statistics are up from previous estimates, made on March 24, 2020, which showed a loss of 76 billion dollars, respectively a decrease in the number of passengers by 46%.
At present, air traffic is reduced by 90% compared to pre-COVID estimates. Which threatens about 6,7 million jobs and could have a negative impact on GDP of $ 452 billion across Europe.
The hole in the budget of European companies is 86 billion dollars
IATA revised the statistics after finding a greater impact than previous expectations of the travel restrictions introduced due to the COVID-19 pandemic. The new IATA analysis is based on a three-month scenario of severe travel restrictions, with a gradual lifting of restrictions in domestic markets, followed by regional and intercontinental travel.
It is essential that governments intervene quickly to minimize this economic damage. First priorities should be direct financial support, loans and tax exemptions to airlines.
Regulatory aid is also crucial, in particular a temporary change in the EU261 to provide more flexibility as regards the conditions for reimbursing canceled flights.
As airlines struggle for survival, the industry seeks to plan for the relaunch of air connectivity once restrictions begin to be lifted. A number of requirements have been identified to ensure a successful restart:
- confidence-building measures will be needed to encourage people to travel
- any temporary measures introduced by governments should be exercised with a clear exit strategy
- global standards with mutual recognition will be essential for the successful resumption of air operations.
"The world will rely on airlines and air connectivity to restore the global economy. A successful restart of the industry will be crucial. To help with this, IATA is hosting a series of regional summits to bring together key governments and industries to maximize the chances of an orderly restart. Harmonization and coordination of measures will be vital. Said Schvartzman.