COVID-19: ACI and IATA issue joint call for aviation industry financial aid to help re-start economies

Groups say time is running out for other governments to provide necessary financial relief to keep entire industry viable and ready to support balanced recovery.

0
931
covid-19-aci-and-iata-issue-joint-call-for-aviation-industry-financial-aid-to-help-re-start-economies
(PHOTO: Shutterstock)

The two main trade groups representing the world’s airports and airlines have issued a joint call for global governments to provide financial relief to the industry to save millions of jobs as the COVID-19 pandemic wreaks havoc on commercial aviation. Airports Council International (ACI) World and the International Air Transport Association (IATA) said governments need to support “the essential connectivity the (aviation) industry will provide for economic recovery”.

A screenshot of the Johns Hopkins University COVID-19 tracking website taken on 3 May. To access the live site, click on the image. (PHOTO: Matt Driskill)

The groups said in their joint statement that aviation is “is doing all it can to maintain air cargo operations vital to supporting global supply chains, including medical shipments critical to fighting COVID-19”.

The economic impact of international travel restrictions “on all involved in the global air transport industry has been severe,” the groups said. “With passenger demand plummeting to unprecedented levels, revenues are falling beyond the ability of even the most extreme cost-cutting measures to mitigate. Airports and airlines continue to face a financial liquidity crisis.”

The groups said the aviation industry supports 65.5 million jobs around the world, including 10.5 million people employed at airports and by airlines, and supports US$2.7 trillion in world economic activity. ACI and IATA are calling for urgent balanced support to the industry  with taxation relief, including alleviation of payroll taxes, corporate taxes, concession fees or other government incomes from the industry loans, loan guarantees or direct support to maintain financial liquidity across the aviation ecosystem.

Angela Gittens, director general of ACI World. (PHOTO: ACI World)

“The financial impact of the current crisis is unlike anything we have ever seen and requires urgent action by governments to assist the aviation industry to protect jobs, ensure essential operations, and plan for recovery,” ACI World Director General Angela Gittens said. “Urgent tax relief and direct financial assistance that is to the benefit of the entire aviation ecosystem is needed to help preserve millions of jobs, protect essential operations, and foster a balanced recovery. Preserving the continuity of operations for airports and airlines and protecting aviation jobs today will result in a faster economic recovery tomorrow.”

 

IATA’s Director General and CEO Alexandre de Juniac said the situation could not be more dire. “Governments will depend on aviation to be ready to lead an economic recovery when this pandemic is behind us,” de Juniac said. “Governments must act now with financial lifelines that only they can provide for airlines and airports to see them through these extraordinary times. Airlines and airports are in this together. The more financially stable our airport partners are, the more they can help the industry to drive a recovery in air travel that will jump start the global economy.”

covid-19-aci-and-iata-issue-joint-call-for-aviation-industry-financial-aid-to-help-re-start-economies
Alexandre de Juniac, IATA’s director general. (PHOTO: IATA file)

IATA issues separate call on Canada

covid-19-aci-and-iata-issue-joint-call-for-aviation-industry-financial-aid-to-help-re-start-economiesIATA issued a separate statement calling on the Canadian government to provide urgent financial relief to airlines there. IATA estimates that revenues generated by airlines in the Canadian market will fall 43.2 percent or C$14.6 billion (US$10.2 billion). That puts at risk nearly 250,000 Canadian jobs and C$25.4 billion of Canada’s GDP, which is generated by aviation directly as well as by aviation-related tourism, IATA said.

“Airlines are facing their darkest hour. Passenger traffic has virtually stopped, and cash flows are almost non-existent. The consequences for the Canadian economy are severe. Government support is needed now to ensure that Canada has a viable airline industry to lead the economic recovery,” said Peter Cerdá, IATA’s regional vice president for the Americas.

covid-19-aci-and-iata-issue-joint-call-for-aviation-industry-financial-aid-to-help-re-start-economies
Peter Cerda, IATA’s regional vice president for The Americas. (PHOTO: IATA)

“Airlines have taken emergency measures to preserve cash. But airlines are among the first and hardest hit. Globally, the industry could suffer a liquidity crisis of up to C$84.7 billion in the second quarter as demand plummets by 80 percent or more,’’ said Cerdá.

Among governments that already have stepped up to help their country’s airlines: The United States provided US$61 billion in relief to the aviation sector; France announced a financial aid package valued at EUR7 billion; South Korea has promised financial support for local Full Service Carriers worth a total of KRW2.29 trillion (US$1.86 billion)

Air transport in Canada contributes C$51.4 billion to the country’s GDP and supports some 633,000 jobs (direct and indirect). Spending by foreign tourists supports another C$16.7 billion of GDP, making a total a contribution of C$68.1 billion. In total, 3.2 percent of the country’s GDP is sustained by the inputs of the air transport sector and foreign tourists arriving by air, IATA said.

“When the COVID-19 virus is brought under control, global economic activity will once again re-start and a viable aviation sector will be critical for the recovery. In a country as vast as Canada it is a lifeline upon which people and businesses depend,” Cerdá said.

Download the latest issue of Asian Aviation here.


For Editorial Inquiries Contact:
Editor Matt Driskill at matt.driskill@asianaviation.com
For Advertising Inquiries Contact
Head of Sales Kay Rolland at kay.rolland@asianaviation.com


 

AAV Media Kit
Previous articleAviation News in Brief 3 May 2020
Next articleBoeing dodges a bullet with US$25 billion bond deal
Asian Aviation
Matthew Driskill is the Editor of Asian Aviation and is based in Cambodia. He has been an Asia-based journalist and content producer since 1990 for outlets including Reuters and the International Herald Tribune/New York Times and is a former president of the Foreign Correspondents Club of Hong Kong. He frequently appears on international broadcast outlets like CNN, Al Jazeera and the BBC and has taught journalism at Hong Kong University and the American University of Paris. Driskill has received awards from the Associated Press for Investigative Reporting and Business Writing and in 1989 was named the John J. McCloy Fellow by the Graduate School of Journalism at Columbia University in New York where he earned his Master's Degree.

LEAVE A REPLY

Please enter your comment!
Please enter your name here