Business World

Keeping passengers, crew safe and government financial relief crucial for airlines recovery

TheMole
Written by TheMole

KUALA LUMPUR, June 10 2020: The key to the recovery of airline industry is the universal implementation of re-start measures agreed through the International Civil Aviation Organisation (ICAO) to keep passengers and crew safe.

The International Air Transport Association (IATA) director-general and chief executive officer, Alexandre de Juniac said in addition to that, effective contact tracing should also give governments the confidence to open borders without quarantine measures.

“That’s an important part of the economic recovery because about 10 per cent of the world’s Gross Domestic Product is from tourism and much of that depends on air travel. Getting people safely flying again will be a powerful economic boost,” he said in a statement.

However, de Juniac cautioned that the industry’s recovery was likely to be challenging due to debt levels, operational inefficiencies, recession and lack of confidence.

“People will want to fly again, provided they have the confidence in their personal financial situation and the measures taken to keep travelers safe. 

“There is no tried and true playbook for a recovery from Covid-19 but the ICAO Takeoff re-start plan outlines globally harmonised. It is important that industry and governments follow it so that travelers will have the maximum reassurance about their safety,” he said.

IATA has also reiterated its insistence that government financial relief is crucial as airlines struggle to survive through the Covid-19 aftermath.

It is expecting airlines to lose US$84.3 billion (RM360 billion) this year for a net profit margin of -20.1 per cent, while revenues will be halved to US$419 billion (RM1.8 trillion).

As for next year, the losses were expected to be reduced to US$15.8 billion (RM67.5 billion) with revenues rising to US$598 billion (RM2.6 trillion).

Financially, 2020 will go down as the worst year in the history of aviation with on average, every day of this year will add US$230 million (RM982.3 million) to industry losses. In total that is a loss of US$84.3 billion. 

Based on IATA’s estimate of 2.2 billion passengers this year, airlines will lose US$37.54 (RM160.33) per passenger.

All regions are projected to record losses this year, with Asia-Pacific posting the highest absolute net losses of US$29 billion.

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