IATA director general Alexandre de Juniac has warned the global aviation sector may face a long road to recovery following the coronavirus pandemic. In his latest remarks he explains the challenges that must be overcome before carriers can return to profitability
We are still in the middle of a crisis. You don’t need me or IATA to tell you that. Planes are not flying.
Last week we shared with you the economic impacts that we expect - a $314 billion loss of passenger revenue, 25 million jobs at stake and a quarter two cash burn of $61 billion.
The implications of this are not theoretical. Today we saw Virgin Australia fall into voluntary administration.
So, our call for immediate relief measures remains. And that is by whatever means possible - direct financial aid; loans, loan guarantees and support for the corporate bond market by governments or central banks; and tax relief.
Our analysis reminds us that the industry’s problems will not magically disappear as the severe measures to control the spread of the virus are eased.
There is a group of passengers - about 60 per cent who will return to travel relatively quickly. But an important 40 per cent are telling us that they will likely wait six months or more. And an even larger portion - nearly 70 per cent - are saying that they want to see their financial situation stabilise before returning to the skies.
This caution is being seen in the behaviour of Chinese and Australian travellers. The virus transmission there is largely seen to be under control. But we have not seen a return of air travel. And indictors from the US domestic market - the world’s largest - align with this.
This means that confidence-building measures will be needed to deal with a slower recovery than we had previously anticipated.
The looming recession means that government stimulus will be critical.
And government and industry must be aligned and coordinated in measures to ensure that travel is safe
Specifically related to the measures that we will need to take, as we mentioned last week, IATA is hosting a series of regional summits to focus on the industry re-start. These bring together governments and key stakeholders. The aim is to help governments and the aviation value chain to work together for an orderly re-start.
An orderly re-start means harmonisation and coordination.
We don’t yet know what measures will be needed to keep flying safe. Each day we are learning more about the virus. This will enable science-based measures that can be implemented effectively and, hopefully, quickly. IATA will continue to work closely with WHO and ICAO to this end.
And when we are at the implementation stage, we will be asking governments to keep three important things in mind:
- First, governments should rely on the industry’s operational expertise so that we can produce the best results in the most efficient manner possible.
- Second, there should be global standards with mutual recognition of implementation by states.
- Third, whatever measures are implemented must have a clear exit-strategy.
The big picture message here is that we don’t want to repeat what happened after 9/11.
Security measures were implemented in an uncoordinated way. And nearly two decades later we are still struggling to achieve harmonisation.
Our message this week is that we are aligned to beat Covid-19.
We must fight the battle as efficiently as possible. And we must prepare confidence boosting measures - including those for safety and economic stimulus - so that aviation can play its critical role in driving the economic recovery.
The International Air Transport Association represents some 290 airlines comprising 82 per cent of global air traffic.
Find out more on the official website.