Dhaka: The International Air Transport Association (IATA) urges Asia-Pacific states to crucially provide financial support to their airline industries impacted by the coronavirus pandemic.
Major Asia-Pacific states could see passenger demand in 2020 reduced by 34 per cent to 44 per cent, IATA said in its latest report. This is based on a scenario where severe restrictions on travel are lifted after three months, followed by gradual recovery.
Bangladesh could see passenger demand reduced by 37 per cent which accounts for 4,218,000 passengers. However, Cambodia (-34 per cent), Vietnam (-34 per cent) and the Philippines (-36 per cent) will be on the lower end of the range of impact, while Thailand (-40 per cent), Pakistan (-40 per cent), Republic of Korea (-40 per cent) and Sri Lanka (-44 per cent) will be largely affected.
“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 per cent this year, with a revenue loss of USD 88 billion. 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,” said Conrad Clifford, Regional Vice President, Asia-Pacific, IATA.
In its latest analysis, IATA expects airlines to post a net loss of USD 39 billion during the second quarter ending June 30. The impact of that on cash burn will be amplified by a USD 35 billion liability for potential ticket refunds. Without relief, the industry’s cash position could deteriorate by USD 61 billion in the second quarter
Australia, New Zealand and Singapore have announced a substantial package of measures to support their aviation industry. “But 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. Jobs as well as the GDP supported by the industry are at risk,” said Clifford.
“Governments need to ensure that airlines have sufficient cash flow to tide them over this period, by providing direct financial support, facilitating loans, loan guarantees, and support for the corporate bond market. Taxes, levies, and airport and aeronautical charges for the industry should also be fully or partially waived. It is critical that these countries still have a viable aviation sector to support the economic recovery, connect manufacturing hubs and support tourism when the COVID-19 crisis is over. They need to act now – and urgently - before it is too late,” concluded Clifford.