IATA: More APAC govt support

IATA: More APAC govt support

The International Air Transport Association (IATA) is urging Asia-Pacific states to take urgent action to provide financial support to their airline industry impacted by the Covid-19 crisis.

Major Asia-Pacific states could see passenger demand in 2020 reduced by between 34% to 44%. This is based on a scenario where severe restrictions on travel are lifted after three months, followed by gradual recovery. Cambodia (-34%), Vietnam (-34%) and the Philippines (-36%) will be on the lower end of the range, while Thailand (-40%), Pakistan (-40%), Republic of Korea (-40%) and Sri Lanka (-44%) will see the largest impact. ‘Based on a scenario in which severe travel restrictions last for three months, the Asia-Pacific region as a whole will see passenger demand reduced by 37% this year, with a revenue loss of US$88 billion,’ says Conrad Clifford, IATA’s regional vice president, Asia-Pacific.

‘While each country will see varying impact on passenger demand, the net result is the same – their airlines are fighting for survival, they are facing a liquidity crisis, and they will need financial relief urgently to sustain their businesses through this volatile situation.’ IATA expects airlines to post a net loss of US$39 billion during the second quarter ending 30 June 2020. The impact of that on cash burn will be amplified by a US$35 billion liability for potential ticket refunds. Without relief, the industry’s cash position could deteriorate by US$61 billion in the second quarter. IATA notes that New Zealand, Australia and Singapore have announced a substantial package of measures to support their aviation industry. ‘Others in the region, including India, Indonesia, Japan, Malaysia, the Philippines, Republic of Korea, Sri Lanka and Thailand, have yet to take decisive and effective action,’ says Clifford.

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