IATA, ACI trade groups continue calls for government relief measures for aviation

Financial relief and evidence-based policies needed for restart and recovery; Government assistance will help safeguard essential operations and millions of jobs.

Airlines around the world, including Cathay, had to ground thousands of planes at the height of the COVID-19 pandemic. (PHOTO: Shutterstock)

The main two trade groups representing the world’s airlines and airports have re-issued calls for government support for their members as the COVID-19 pandemic continues eat away at the aviation industry around the world. The International Air Transport Association (IATA) and Airports Council International (ACI) World warned that the airline industry faces a bleak outlook and called on governments around the world to continue providing relief measures as the COVID-19 crisis continues.

ACI World estimates a reduction of more than 4.6 billion passengers with a decline in total airport revenues on a global scale of more than US$97 billion for 2020. Airlines are expected to post a loss of US$84.3 billion in 2020, according to IATA. “The bulk of airlines make their money in the northern summer season, while the winter season, even in the best of times, is a struggle to remain profitable. For example, the 2019 net profit margin for European airlines followed the normal seasonal pattern and was 9 percent and 17 percent respectively in Q2 and Q3 (northern summer). But it started at -1 percent in Q1 and finished the year at 2 percent in Q4 (northern winter). The winter season will be even more challenging amid the recovery from COVID-19”, IATA said.

IATA also reiterated its call for “slot relief” for airlines because carriers cannot forecast demand in the markets that do have some traffic because the travelling public has cut down on the lead time in buying tickets. IATA also said there was great reluctance for people to travel again and said polls showed only 45 percent of travellers surveyed recently intend to return to the skies within a few months of the pandemic subsiding. A further 36 percent said that they would wait six months. That is a significant shift from April 2020 when 61 percent said that they would return to travel within a few months of the pandemic subsiding and 21 percent responded that they would wait about six months, IATA said.

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

The organisation also said:

  • Overall bookings are down 82 percent year-on-year compared to June 2019;
  • Long-haul forward bookings for the first week in November 2020 are 59 percent below normal levels. Historical trends show about 14 percent of airline tickets are sold 22 weeks in advance of travel. Current bookings for 1-7 November show that tickets have been sold to only 5 percent of the 2019 number of passengers;
  • Passengers are booking closer to the time of travel. Bookings for travel 20 or more days in the future accounted for 29 percent of bookings made in May 2020, down from 49 percent in 2019. Similarly, 41 percent of bookings made in May 2020 were for travel within three days, more than double the 18 percent in May 2019.
Alexandre de Juniac, IATA’s director general. (PHOTO: IATA file)

“People are returning to the skies but the horizon of uncertainty of the COVID-19 crisis is extending. Forward bookings are down, and people are hedging their travel bets by booking closer to the time of travel. Airlines in the Northern hemisphere rely on a strong summer season and a predictable booking curve to get them through the lean months. But neither of these conditions are in place and airlines will need continued help from governments to survive a hard winter. Airlines will need much more flexibility to plan schedules around these changing consumer trends. Financial and operational flexibility equals survival,” said Alexandre de Juniac, IATA’s director general and CEO.

Airlines like Singapore Air have had to ground thousands of planes. (PHOTO: Steve Strike/Outback Photographics)

IATA highlighted four keys areas where governments could assist airlines:

  1. Extending the waiver from the 80-20 use-it-or-lose-it rule in the Worldwide Airport Slot Guidelines;
  2. Continued financial assistance in ways that do not increase industry debt levels which have risen sharply;
  3. Extensions to wage subsidies and corporate taxation relief measures;
  4. Avoiding increases in charges and fees.

“Each day sees more people traveling. That’s good for the economy. The numbers are moving in the right direction, but we are by no means anywhere near normal or sustainable levels of activity. Financial relief measures are still desperately needed. And policy-relief measures like a slot usage waiver remain critical. Governments need to grant that by no later than the end of July to provide at least that certainty for this beleaguered and battered industry,” said de Juniac.

Empty check-in counters at Singapore’s Changi Airport. (PHOTO: Shutterstock)

Meanwhile, ACI World also said airports should not be left out of the equation because they remain “important engines of economic growth, wealth creation and employment. They employ – either directly or indirectly – more than 6.1 million globally which makes up 60 percent of all employment in the aviation sector and provide direct societal and economic benefits to the local, regional, and national communities they serve”.

As airports in some regions embark on the first steps in restarting operations and make plans for a sustained, long term recovery, ACI World said any recovery needs to be underpinned by financial assistance and relief to safeguard essential operations and protect millions of jobs. ACI World is urging the adoption of the following policy responses to help the industry as it recovers:

  • Protection of aeronautical revenues;
  • Tax relief and concession fee waivers;
  • An evidence-based and data-driven approach to slots;
  • Continued support for air cargo operations;
  • Comprehensive financial relief including wage subsidy schemes, grants and subsidies, secured financing, loans at preferential rates, and bank guarantees;
Angela Gittens, director general of ACI World. (PHOTO: ACI World)

“Airports need urgent relief and assistance to help them as they begin to restart operations, weather the far-reaching economic ramifications of the crisis, and help lay the foundation of a balanced recovery,” ACI World Director General Angela Gittens said. “With the massive revenue shortfall, airports continue to face high fixed costs and rising costs related to health measures at airports coupled with creeping increases in the cost of capital are new challenges brought on by the pandemic. ACI World believes these costs need to be considered by governments and the impact they have on the airport cost base.

“Airports are keen to support traffic growth but the allocation of airport capacity also requires a balanced approach for all aviation stakeholders. Waivers on slots, or a suspension on the use-it-or lose rule, could potentially limit choice for travellers and weaken competition among airlines as part of industry recovery efforts. ACI World urges regulators to follow a data-driven and evidence-based approach to assess whether further blanket slot waivers are the appropriate measure in re-establishing local, regional and global connectivity.”

IATA: Criteria for COVID-19 testing in the air travel process

Some airlines are testing passengers for COVID-19 before they even check in for their flights. (PHOTO: Emirates)

IATA also released criteria for the use of COVID-19 testing in the travel process and said “should governments choose to introduce COVID-19 testing for travellers arriving from countries considered as high risk, testing must deliver results fast, be able to be conducted at scale, and operate to very high rates of accuracy. Additionally, testing must be cost-effective and not create an economic or logistical barrier to travel”.

Download the IATA COVID testing presentation here.

The International Civil Aviation Organisation (ICAO) published Take-off guidance which is the global guidance for governments to follow in reconnecting their people and economies by air. Take-off outlines layers of measures to mitigate the risk of COVID-19 transmission during air travel and the risk of importation of COVID-19 via air travel.  COVID-19 testing should not be a necessary condition for re-opening borders or resuming air services.

Technology for rapid point-of-care Polymerized Chain Reaction (PCR) testing could be a useful layer of protection for travellers from countries considered as higher risk, potentially removing the need for more burdensome and intrusive measures such as quarantine which is a major barrier to travel and the recovery of demand”, IATA said.

“Airlines are committed to reducing the risks of COVID-19 transmission via air travel and COVID-19 testing could play an important role. But it must be implemented in line with ICAO’s global re-start guidance with the aim of facilitating travel. Speed, scale and accuracy are the most critical performance criteria for testing to be effectively incorporated into the travel process,” said IATA’s de Juniac.

For Editorial Inquiries Contact:
Editor Matt Driskill at matt.driskill@asianaviation.com
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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.


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