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Airline’s too affected
Meanwhile, the International Air Transport Association (IATA) and its members continue to support governments in their efforts to contain the spread of COVID-19.
IATA has urged governments to prepare for the broad economic consequences of these actions, quickly to the financial frailty of airlines, and follow WHO recommendations.
These calls come in response to the US government’s banning of non-US citizens, and individuals who are not legal permanent residents of the US, who have been in the Schengen Area in the past 14 days from entry into the United States.
There was a total of around 200,000 flights scheduled between the United States and the Schengen Area, equivalent to around 550 flights per day last year.
“These are extraordinary times and governments are taking unprecedented measures. Safety—including public health—is always a top priority,” Alexandre de Juniac, IATA’s Director General and CEO said.
“Airlines are complying with these requirements. Governments must also recognize that airlines—employing some 2.7 million people—are under extreme financial and operational pressures. They need support.”
Financial viability
So far, airlines are already struggling with the severe impact that the COVID-19 crisis has had on their business. On March.05, 2020, IATA estimated that the crisis could wipe out some $113 billion of revenue. That scenario, however, did not include such severe measures as the US and other governments (including Israel, Kuwait, and Spain) have since put in place.
The US measures, according to IATA, will add to this financial pressure. The total value of the US-Schengen market in 2019 was $20.6 billion. The markets facing the heaviest impact are US-Germany ($4 billion), US-France ($3.5 billion) and US-Italy ($2.9 billion).
“This will create enormous cash-flow pressures for airlines. We have already seen Flybe go under. And this latest blow could push others in the same direction. Airlines will need emergency measures to get through this crisis,” de Juniac said.
“Governments should be looking at all possible means to assist the industry through these extreme circumstances. Extending lines of credit, reducing infrastructure costs, lightening the tax burden are all measures that governments will need to explore. Air transport is vital, but without a lifeline from governments we will have a sectoral financial crisis piled on top of the public health emergency.”
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