COVID-19: IATA says 25 million jobs at risk as air travel shuts down

The global trade group that represents airlines said at least 25 million jobs are at risk of disappearing as international air travel grinds to a virtual halt because of the COVID-19 global pandemic. The International Air Transport Association (IATA) has released new analysis showing that millions more jobs – at least 65.5 million that depend on aviation – could also be at risk, IATA officials said in a media conference call on 7 April. Those jobs are in sectors like travel and tourism. IATA research calculates that 25 million jobs in aviation and related sectors are endangered across the world: 2 million jobs in Asia-Pacific 6 million jobs in Europe 9 million jobs in Latin America 0 million jobs in North America 0 million jobs in Africa 9 million jobs in the Middle East Download the full IATA report here. Listen to the media conference call here. IATA officials say if the shutdown of air travel continues for three months airlines are expected to see full-year passenger revenues fall by US$252 billion in 2020 compared to 2019. The second quarter is the most critical with demand falling 70 percent at its worst point, and airlines burning through $61 billion in cash. IATA has called on governments around the world to provide aid to the aviation industry including direct financial support, loans, loan guarantees and support for the corporate bond market as well as tax relief. “There are no words to adequately describe the devastating impact of COVID-19 on the airline industry. And the economic pain will be shared by 25 million people who work in jobs dependent upon airlines. Airlines must be viable businesses so that they can lead the recovery when the pandemic is contained. A lifeline to the airlines now is critical,” said Alexandre de Juniac, IATA’s director general and CEO. IATA Director General Alexandre de Juniac (centre) and other IATA officials address reporters in Geneva at IATA’s Media Day in December 2019. (PHOTO: IATA) De Juniac also said the industry needed to look to the eventual time when it will start flying again. “We have never shuttered the industry on this scale before. Consequently, we have no experience in starting it up. It will be complicated. At the practical level, we will need contingencies for licenses and certifications that have expired. We will have to adapt operations and processes to avoid reinfections via imported cases. And we must find a predictable and efficient approach to managing travel restrictions which need to be lifted before we can get back to work. These are just some of the major tasks that are ahead of us. And to be successful, industry and government must be aligned and working together,” said de Juniac. “We are not expecting to re-start the same industry that we closed a few weeks ago. Airlines will still connect the world. And we will do that through a variety of business models. But the industry processes will need to adapt. We must get on with this work quickly. We don’t want to repeat the mistakes made after 9/11 when many new processes were imposed in an uncoordinated way. We ended up with a mess of measures that we are still sorting out today. The 25 million people whose jobs are at risk by this crisis will depend on an efficient re-start of the industry,” said de Juniac. Brian Pearce, IATA’s chief economist, weighed in on the media conference call and said Europe was bearing the brunt of the travel shutdown with 90 percent of flights being cancelled and said there were similar figures “more or less” for Africa. “China is looking a bit different” with a forecast for a better second quarter there but numbers will still continue to be down until at least the fourth quarter. He warned that airlines were running out of cash and could “burn through” US$60 billion in the second quarter. Pearce said “most airlines don’t have that much cash…the median airline in all regions has two months of cash…many airlines will be or will have run out of cash…the wider issue is that air transport is critical for the modern world…the situation today is this…it’s a 70 percent decline in flights…the China domestic market is under control and the US domestic market still has some activity…but there are extremely thin connections between continents.” Pearce reiterated that other industries like tourism, hotels and others that depend on travellers will be hurt as the “damage for aviation will ripple through the wider economy and through supply chains”. De Juniac added that “sanitary conditions will need to be imposed so that we do not see the virus re-emerge and we will try to have a regional approach with governments to implement a coordinated restart plan”. Disinfecting an airplane. (PHOTO: Shutterstock) De Juniac, in the Q&A session, said the industry would stick with its plans to curb its environmental emissions but right now we shouldn’t undermine the importance of this crisis…it’s a matter of survival of the industry…so of course we will comply with our environmental obligations…just before that we will need to survive”. He also said he expects airlines to continue to invest in fuel-efficient aircraft. Pearce added that “we need to get the health issues right and if we get those right we should see a rebound in travel”. Both IATA officials said regions with high domestic traffic will see a faster return while the long-haul industry will take longer to recover.