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Shutdown To Cost Airlines $252 Billion As IATA Reiterates Bailout

Airlines yesterday, reviewed the cost of airspace shutdown, pushing potential losses from $113 billion to $252 billion, as passenger revenue slumps globally.

The airlines, under the aegis of the International Air Transport Association (IATA), said many airlines are on the brink of collapse without urgent support from their home governments.

IATA welcomed the support of those governments that had provided financial relief to airlines and urged other governments to follow suit before more damage is done.

The association that represents some 290 airlines had warned that Nigeria was at risk of losing 2.2 million overseas-bound passengers and $434 million of revenue if the coronavirus spread continues to escalate. The National Association of Nigerian Travel Agencies (NANTA) had recorded over 4000 jobs and N180 billion losses.

IATA’s Director-General and Chief Executive Officer (CEO), Alexandre de Juniac, said airlines are currently fighting for survival in every corner of the world.

“Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business. For airlines, it’s apocalypse now. And there is a small and shrinking window for governments to provide a lifeline of financial support to prevent a liquidity crisis from shuttering the industry,” de Juniac said.

According to IATA’s latest analysis, released Tuesday, annual passenger revenues will fall by $252 billion if severe travel restrictions remain in place for three months. That represents a 44 percent decline compared to 2019.

This is well-over double IATA’s previous analysis of $113 billion revenue hit that was made before countries around the world introduced sweeping travel restrictions.

“It did not seem possible, but in a matter of days, the crisis facing airlines worsened dramatically. We are 100 percent behind governments in supporting measures to slow the spread of covid-19. But we need them to understand that without urgent relief, many airlines will not be around to lead the recovery stage.

“Failure to act now will make this crisis longer and more painful. Some 2.7 million airline jobs are at risk. And each of those jobs supports a further 24 in the travel and tourism value chain. Some governments are already responding to our urgent calls, but not enough to make up the $200 billion needed,” de Juniac said.

In urging more government action, de Juniac cited examples of state supports. Australia has announced an A$715 million (US$430 million) aid package comprising refunds and forward waivers on fuel taxes, and domestic air navigation and regional aviation security charges.

Brazil is allowing airlines to postpone payments of air navigation and airport fees.

China has introduced a number of measures, including reductions in landing, parking and air navigation charges as well as subsidies for airlines that continued to mount flights to the country.

Hong Kong Airport Authority (HKAA), with government support, is providing a total relief package valued at HK$1.6 billion (US$206 million) for the airport community including waivers on the airport and air navigation fees and charges, and certain licensing fees, rent reductions for aviation services providers and other measures.

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