IATA expects a 37% decline in Asia-Pacific passenger demand this year from the coronavirus pandemic, wiping out $88 billion in revenue.
This is based on a scenario where severe travel restrictions last for three months, followed by a gradual recovery, the trade association said today.
Conrad Clifford, IATA’s regional vice president for Asia-Pacific, says: “While each country will see varying impact on passenger demand, the net result is the same – their airlines are fighting for survival, they are facing a liquidity crisis, and they will need financial relief urgently to sustain their businesses through this volatile situation.”
The association predicts that Sri Lanka, South Korea, Pakistan and Thailand could see the biggest declines in passenger demand, between 40% and 44%.
IATA has called on governments to take urgent action to support airlines through the crisis, noting packages already announced in Australia, New Zealand and Singapore.
“But others in the region, including India, Indonesia, Japan, Malaysia, the Philippines, Republic of Korea, Sri Lanka and Thailand, have yet to take decisive and effective action,” Clifford states.
IATA on 31 March estimated that the global airline industry could post a $39 billion net loss during the second quarter and that airlines could burn through $61 billion of their cash reserves in that period.
“Governments need to ensure that airlines have sufficient cash flow to tide them over this period, by providing direct financial support, facilitating loans, loan guarantees, and support for the corporate bond market,” Clifford advises.
“Taxes, levies, and airport and aeronautical charges for the industry should also be fully or partially waived