25 Million Jobs at Risk with Airline Shutdown.

On the 7th of April, Geneva – The International Air Transport Association (IATA)-released a new analysis showing that 25 million jobs are at risk of disappearing with the plummeting demand for air travel amid the COVID-19 crisis.

Global Breakdown of Potential Job Losses

“There are no words to adequately describe the devastating impact of COVID-19 on the airline industry. And the economic pain will be shared by 25 million people who work in jobs dependent upon airlines. Airlines must be viable businesses so that they can lead the recovery when the pandemic is contained. A lifeline to the airlines now is critical.”

Alexandre de Juniac, IATA’s Director General and CEO

Global Breakdown of Potential Job Losses

Globally, about 65.5 million people’s livelihood depends on the aviation industry. This includes sectors such as travel and tourism, and among these huge numbers 2.7 million airlines jobs according to IATA.

IATA, with the scenario of severe travel restrictions lasting for three months research, calculates that 25 million jobs in aviation and related sectors are endangered across the world:

  • 11.2 million jobs in Asia-Pacific
  • 5.6 million jobs in Europe
  • 2.9 million jobs in Latin America
  • 2.0 million jobs in North America
  • 2.0 million jobs in Africa
  • 0.9 million jobs in the Middle East

And in the same scenario, airlines are expected to see full year passenger revenues fall by $252 billion (-44%) in 2020 compared to 2019. The second quarter is the most critical with demand falling 70% at its worst point, and airlines burning through $61 billion in cash.

Airlines are calling on governments to provide immediate financial aid to help them remain viable businesses able to lead the recovery when the pandemic is contained. Specifically, IATA calls for:

  • Direct financial support
  • Loans, loan guarantees and support for the corporate bond market
  • Tax relief

Cash Refunds Could Take Airlines to The Brim.

With these, never before seen statistics, it might come as no surprise that airline finances are now so fragile that they can’t afford to refund customers.

“The key element for [airlines] is to avoid running out of cash, so refunding the cancelled ticket for us is almost unbearable financially speaking.”

Alexandre de Juniac, IATA’s Director General and CEO

$35 Billion Due in Refunds

IATA said that about $35 billion of tickets were due for refund at the end of the second quarter, and that vouchers or a delayed refund was all airlines could offer. IATA has approached governments to ask them not to force airlines to provide cash refunds.

IATA has been asking governments for a reduction of charges and taxes to help its members, which represent 82 per cent of global air traffic, survive, and for funds to help restart routes in future.

It said on Tuesday that European countries had agreed to defer air traffic control charges totalling some $1.2 billion from February to May.

Sources: IATA and Reuters

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