IATA appeals for emergency gov’t aid for PH, Asian airlines

Published March 27, 2020, 12:00 AM

by manilabulletin_admin

By EMMIE V. ABADILLA

The International Air Transport Association (IATA) yesterday (March 26) appealed for emergency support for airlines from the heads of government of the Philippines and 17 other States in Asia-Pacific as the industry faces a US$88-billion revenue loss in the region due to the COVID-19 crisis.

The umbrella association of the aviation sector also sought help from Bangladesh, India, Japan, Malaysia, Pakistan, Republic of Korea, Thailand and Vietnam.

IATA estimates that the COVID- 19 crisis will reduce passenger demand in Asia-Pacific by 37 percent this year compared to 2019.

This is based on a scenario where severe restrictions on travel are lifted after 3 months, followed by gradual recovery.

“For airlines, it’s apocalypse now,” declared Alexandre de Juniac, IATA’s Director General and CEO. “Airlines are fighting for survival in every corner of the world. Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business.”

“And there is a small and shrinking window for governments to provide a lifeline of financial support to prevent a liquidity crisis from shuttering the industry,” he warned.

In a matter of days, the crisis facing airlines worsened dramatically, according to the IATA CEO.

“We are 100% behind governments in supporting measures to slow the spread of COVID-19. But we need them to understand that without urgent relief, many airlines will not be around to lead the recovery stage.”

“Failure to act now will make this crisis longer and more pain¬ful. Some 2.7 million airline jobs are at risk. And each of those jobs supports a further 24 in the travel and tourism value chain. Some governments are already responding to our urgent calls, but not enough to make up the $200 billion needed,” de Juniac elaborated.

IATA proposed a number of options for governments to consider.

First is direct financial support to passenger and cargo carriers to compensate for reduced revenues and liquidity attributable to travel restrictions imposed as a result of COVID-19.

Second is the grant of loans, loan guarantees and support for the corporate bond market by governments or central banks.

The corporate bond market is a vital source of finance, but the eligibility of corporate bonds for central bank support needs to be extended and guaranteed by governments to provide access for a wider range of companies.

Third is tax relief such as rebates on payroll taxes paid to date in 2020 and/or an extension of payment terms for the rest of 2020, along with a temporary waiver of ticket taxes and other government-imposed levies.

“A growing number of governments in Asia-Pacific, including Australia, New Zealand, Singapore, have announced financial relief packages for the airline industry and we are grateful to them,” noted Conrad Clifford, IATA’s Regional Vice President for Asia Pacific.

“But we need more governments to come on board to support the airline industry serving their markets,” he emphasized.

“There are over 30 million jobs supported by the aviation industry that are at stake. Also at risk is the aviation connectivity that is needed to support supply chains, the flow of essential goods and medical supplies, as well as repatriation flights to bring home citizen stranded overseas,” he explained.

 
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