As the trade association for the world’s airlines updated its impact assessment estimate of 2020 revenue losses from the coronavirus crisis to more than $250 billion, global airlines urged governments on Tuesday to speed-up bailouts to rescue the air transport industry.
“We clearly need massive action very quickly and urgently,” Alexandre de Juniac, Director General of the International Air Transport Association (IATA), told reporters.
With planes unable to fly because of travel restrictions, compounded by a plunge in demand over fears of contagion, airlines worldwide have grounded most of their fleets, and many have said they need government support to survive.
The industry is now contemplating months without flying. Ryanair, Europe’s biggest airline by passenger numbers, said on Tuesday it did not expect to operate flights in April or May.
Many will not survive such a hammer blow to their finances. IATA said that without government support, up to half of airlines face possible bankruptcy in the coming weeks.
“We have a liquidity crisis coming at full speed — no revenues and costs still on our (books), so we desperately need some cash,” de Juniac said.
India, UAE and a host of other countries have closed their borders for international airlines. India will also stop domestic flights from midnight on Tuesday. IATA’s Chief Economist Brian Pearce described the current crisis as the gravest that the global civil aviation has faced.
Pearce said European airlines were most at risk, with airline capacity in the European region forecast to be down 90% for the second quarter of 2020.
Analysts have said indebted Norwegian Air is one of the most vulnerable, but it was helped by a small government cash injection on Tuesday as it began talks with creditors worried about its liquidity.
IATA broadly stuck to a forecast made last week that government bailouts worth about $200 billion were needed, even as it more than doubled its estimate for revenue losses in 2020 to $250 billion, compared with the $113 billion forecast it made just 2½ weeks ago. That would represent a 44% decline on 2019’s income.