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Thu 3 Sep 2020 09:23 AM

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IATA chief lays out crisis facing aviation amid Covid-19 disruption

International Air Transport Association calls on gov'ts to reopen borders as latest figures highlight air traffic turmoil among Middle East airlines

IATA chief lays out crisis facing aviation amid Covid-19 disruption

The International Air Transport Association (IATA) has called on governments to work together to urgently find ways to re-establish global connectivity by re-opening borders and to continue with relief measures to sustain airlines during the Covid-19 crisis.

IATA’s call reflects deep industry frustration as government policies such as closed borders, travel restrictions and quarantines continue to annihilate travel demand.

The appeal comes as new figures showed that Middle Eastern airlines posted a 93.3 percent traffic decline for July compared to the year-earlier period. Capacity tumbled 85.6 percent and load factor sank 43.4 percent to just 38 percent.

Globally, total July traffic was 79.8 percent below 2019 levels, IATA said.

“Protecting their citizens must be the top priority of governments. But too many governments are fighting a global pandemic in isolation with a view that closing borders is the only solution. It’s time for governments to work together to implement measures that will enable economic and social life to resume, while controlling the spread of the virus,” said Alexandre de Juniac, IATA’s director general and CEO.

He said governments must grasp the seriousness of the crisis facing the airline industry and its consequences for their citizens; urging them to re-open borders, continue relief measures and show global leadership.

The world remains largely closed to travel despite the availability of global protocols to enable the safe re-start of aviationdeveloped by governments through the leadership of the International Civil Aviation Organisation (ICAO) with the support of the World Health Organization (WHO).

This guidance covers all aspects of the passenger journey and recommends sanitary measures to keep travellers safe and reduce the risk of importing infection.

“Airlines have been largely grounded for a half-year. And the situation is not improving. In fact, in many cases it is going in the wrong direction. We see governments replacing border closures with quarantine for air travelers. Neither will restore travel or jobs. Worse, governments are changing the entry requirements with little notice to travellers or coordination with their trading partners. This uncertainty destroys demand. Ten percent of the global economy is sustained by travel and tourism; governments need to do better to re-start it,” said de Juniac.

Additionally, IATA is proposing travel bubbles to mitigate risks between specific markets and foresees a much wider and strategic use of Covid-19 testing as technology improves accuracy, speed and scalability.

“No government wants to import Covid-19. Equally, no government should want to see the economic hardships and associated health impacts of mass unemployment. Successfully getting through this crisis requires careful risk-management with effective measures. If government policies focus on enabling a safe re-start, aviation is well-prepared to deliver. Risk-management is a well-developed discipline that airlines rely on to keep travel safe and secure,” said de Juniac.

He added: "IATA will work with governments, medical experts and testing manufacturers to accelerate proposals specifically focused on using Covid-19 testing to re-build confidence, re-open borders, re-start aviation, re-charge demand and restore jobs. There is much at stake and no time to lose.”

With the exception of some domestic markets there is little evidence of an early industry recovery. Airlines continue to lose billions of dollars and are facing difficult decisions to resize their operations and workforce for the future.

“Many airlines will not have the financial means to survive an indefinite shutdown that, for many, already exceeds a half-year. In these extraordinary times, governments will need to continue with financial and other relief measures to the greatest extent possible. It’s a solid investment in the recovery because each airline job saved supports 24 in the broader economy. And a functioning airline industry will be a critical enabler for economies to regain their full power,” said de Juniac.

Facing an industry loss of $84.3 billion this year, a 50 percent cut in revenues and high fixed costs for aircraft and labour, the financial viability of many airlines is in question. Government relief has been a critical lifeline. But what relief has been given is quickly running out.

IATA said government measures to provide additional financial buffers against failure will be critical, and these must not increase already ballooning debt levels.

IATA added that the most urgent regulatory relief is a global waiver on the use-it-or-lose-it 80-20 slot rule. The severe uncertainty in the market means that airlines need the flexibility to adjust schedules to meet demand without the pressure of being penalized for not using allocated slots.

Many governments, including China, Brazil, Mexico, Singapore, Australia and New Zealand have granted waivers for the winter 2020 season but the European Commission is dragging its feet, said the aviation authority.

“The European Commission’s delay in granting a full-season waiver of the 80-20 slot rule for the Northern Hemisphere winter season is bad for everyone. Airlines and airports will scramble while consumer uncertainty will only increase. As the Commission returns from its summer activities, granting a full-season waiver should be at the top of the aviation priority list,” said de Juniac.

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