Airlines in the Middle East continue to be battered by Covid-19 as the impacts of the coronavirus crisis in Mena deepen.
The region’s airlines could lose $24bn of passenger revenue this year compared to 2019. That is $5bn more than what was expected at the beginning of the month, according to the global trade body of airlines- IATA.
Job losses in aviation and related industries could grow to 1.2mn. That is half of the region’s 2.4mn aviation-related employment. Previous estimate was 0.9mn.
Full-year 2020 traffic is expected to plummet by 51% compared to 2019. Previous estimate was a fall of 39%.
GDP supported by aviation in the region could fall by $66bn from $130bn and previous estimate was $51bn.
Globally, airlines could lose $252bn in revenue from passenger operations this year because of the pandemic.
Border closure, travel restrictions, social and physical distancing and self-isolation are now being implemented globally in containing the highly contagious viral attack.
While it won’t be enough to salvage the fortunes of airlines- earnings from cargo operations- perhaps this year, will certainly help them narrow losses from the collapse in passenger operations.
A coordinated approach among governments is necessary to keep air cargo flowing, experts say. IATA has pointed out that delays in permit approvals, quarantine measures for air cargo crew and insufficient support on the ground continue to hamper the movement of cargo flights globally.
The industry has called for a combination of direct financial support, loans, loan guarantees, support for the corporate bond market, and tax relief to help it tide over the unprecedented crisis.
In addition to vital financial relief, the industry will also need careful planning and co-ordination to ensure that airlines are ready when the pandemic is contained.
As governments struggle to contain the Covid-19 pandemic, an economic catastrophe has unfolded. Re-starting aviation and opening borders will be critical to the eventual economic recovery. “Airlines are eager to get back to business when and in a way that it is safe. But starting up will be complicated. We need to make sure that the system is ready, have a clear vision of what is needed for a safe travel experience, establish passenger confidence and find ways to restore demand. Co-operation and harmonisation across borders will be essential to re-start aviation,” IATA’s regional chief Mohamed al-Bakri recently told the region’s media in a video conferencing.
Clearly, passenger traffic has all but ground to a halt and revenue streams have evaporated. No amount of cost cutting will save airlines from a liquidity crisis. The collapse of air transport will have devastating effects on countries’ economies and jobs.
And in a region where aviation is a key pillar of many nations’ economies the effect will be much worse. For this reason, direct financial support is essential to maintain jobs and ensure airlines can remain viable businesses.
To minimise the broad damage that these losses would have across the Middle East economies, it is vital that governments step up their efforts to aid the industry.
Governments, therefore, should act swiftly as the region’s airlines fight for survival amidst the pandemic.
