Airlines' grouping writes to Malaysia, Asia-Pacific govts to seek financial aid

Airlines' grouping writes to Malaysia, Asia-Pacific govts to seek financial aid
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KUALA LUMPUR (March 26): The International Air Transport Association (IATA) has written to the heads of government of 18 Asia-Pacific countries including Malaysia to appeal for emergency support to airlines as they fight for survival due to loss of air travel demand amid the Covid-19 crisis.

The other countries include Bangladesh, India, Japan, Pakistan, the Philippines, South Korea, Thailand and Vietnam.

"For airlines, it’s apocalypse now. 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,” said IATA director-general and CEO Alexandre de Juniac in a statement today.

“Airlines are 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.

"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," he added.

IATA estimates that the Covid-19 crisis will reduce passenger demand in Asia-Pacific by 37% this year from 2019, with a revenue loss of US$88 billion. This is based on a scenario where severe restrictions on travel are lifted after three months, followed by gradual recovery.

de Juniac also pointed out that 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 US$200 billion needed,” he said.

The airlines' grouping is proposing three options for governments to consider: direct financial support to passenger and cargo carriers; loans, loan guarantees and support for the corporate bond market by governments or central banks; and tax relief.

“A growing number of governments in Asia-Pacific, including Australia, New Zealand, Singapore, have announced financial relief packages for the airline industry. But we need more governments to come on board to support the airline industry serving their markets,” said IATA regional vice-president for Asia-Pacific Conrad Clifford.

“There are over 30 million jobs supported by the aviation industry that are at stake. Also at risk is the aviation connectivity that is needed to support supply chains, the flow of essential goods and medical supplies, as well as repatriation flights to bring home citizen stranded overseas,” added Clifford.

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