The International Air Transport Association (IATA) has urged governments at all levels to prepare for the broad economic consequences precipitated by the spread of COVID-19.
“These are extraordinary times and governments are taking unprecedented measures. Safety, including public health, is always a top priority.
“Airlines are complying with these requirements. Governments must also recognise that airlines, employing some 2.7 million people, are under extreme financial and operational pressures. They need support,” said IATA’s Director General and CEO, Alexandre de Juniac in response to the US government’s banning of non-US citizens, and individuals who are not legal permanent residents of the US.
The association, representing over 290 airlines around the world, in a statement said the US action would bring “adverse economic impact” on airlines because “the dimensions of the US-Europe market are enormous.”
IATA disclosed that in 2019, there was a total of around 200,000 flights between the United States and the Schengen Area, equivalent to around 550 flights per day. There were around 46 million passengers (roughly equivalent to 125,000 travellers every day).
IATA also urged governments to; “respond quickly to the financial frailty of airlines, and follow WHO (World Health Organisation) recommendations.”
While the US measure recognises the need to continue to facilitate trans-Atlantic trade, the economic fallout of this will be broad.
“Governments must impose the measures they consider necessary to contain the virus. And they must be fully prepared to provide support to buffer the economic dislocation that this will cause.
“In normal times, air transport is a catalyst for economic growth and development. Suspending travel on such a broad scale will create negative consequences across the economy. Governments must recognise this and be ready to support,” said de Juniac.
According to IATA, airlines are already struggling with the severe impact that the COVID-19 crisis has had on their business.
On 5 March 2020, IATA estimated that the crisis could wipe out some $113 billion of revenue. That scenario did not include such severe measures as the US and other governments (including Israel, Kuwait, and Spain) have since put in place.
The US measures will add to this financial pressure. The total value of the US-Schengen market in 2019 was $20.6 billion. The markets facing the heaviest impact are US-Germany ($4 billion), US-France ($3.5 billion) and US-Italy ($2.9 billion).
“This will create enormous cash-flow pressures for airlines. We have already seen Flybe go under. And this latest blow could push others in the same direction.
“Airlines will need emergency measures to get through this crisis. Governments should be looking at all possible means to assist the industry through these extreme circumstances,” said IATA DG.