Global airlines will lose $252 billion (Dh925bn) in passenger revenue this year, a 44 per cent drop from 2019, as the rapid spread of the coronavirus and ensuing travel bans hit the industry, the International Air Transport Association said. The latest assessment is more than double the organisation's March 5 estimate of a $113bn loss.
"Speed up: we need massive action very quickly, urgently," said Alexandre de Juniac, Iata's director general, said on a media call. "We have a liquidity crisis coming at full speed ... we desperately need some cash."
Worldwide air travel demand is forecast to plunge 38 per cent in 2020, if travel limitations and border closures continue for another three months, Iata said today. The industry lobby group urged governments to act faster to rescue their airlines with financial packages.
Airlines worldwide are suspending most or all of their passenger flights, grounding jets and axing jobs in efforts to preserve cash due to heightened travel bans as governments try to contain the spread of the deadly virus.
Iata is escalating pleas for state assistance to airlines as it predicts that nearly half of the operators could potentially face bankruptcy in the coming weeks. The pandemic is the greatest challenge to the aviation industry to date.
Covid-19 has infected about 396,000 people worldwide and killed more than 17,200, according to Johns Hopkins University, which is tracking global data on the outbreak. More than 103,300 people have also recovered.
In its latest report, Iata estimates Middle East airlines could lose $19bn in passenger revenue as demand drops 39 per cent in 2020, compared with last year.
Airlines support 2.7 million jobs and every $1 of airline revenue generates $3.80 in economic growth, according to Iata, with thousands of workers around the world already losing jobs or being placed on paid or unpaid leave.
Governments need to preserve the air transport industry to facilitate future economic recovery, which will depend on the movement of goods and tourists, said Brian Pearce, Iata’s chief economist.
A recovery in air travel demand will take longer than previous crises such as the 2003 SARS outbreak, as the coronavirus outbreak has spread globally and is expected to lead to a “deep” economic recession, Mr Pearce said.
A silver lining for the industry is early signs of a pick-up in China's domestic air travel market, he said.