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(Sharecast News) - The International Air Transport Association (IATA) said up to $200bn could be needed to save the industry globally and called for governments in Africa and the Middle East to provide emergency support for airlines hit by the Covid-19 crisis.
IATA suggested direct financial support to passenger and cargo carriers, loans, loan guarantees and support for the corporate bond market along with rebates on payroll taxes paid to date in 2020, along with a temporary waiver of ticket taxes and other government levies.
Air travel demand has evaporated as the virus turned into a pandemic, leading to countries shutting their borders to combat the spread.
"Stopping the spread of Covid-19 is the top priority of governments. But they must be aware that the public health emergency has now become a catastrophe for economies and for aviation," IATA said in a statement.
The industry body said the current crisis was "much worse and far more widespread" than the 2001 terror attacks on New York, SARS outbreak or 2008 global financial crisis.
"Airlines are fighting for survival. Many routes have been suspended in Africa and Middle East and airlines have seen demand fall by as much as 60% on remaining ones. Millions of jobs are at stake. Airlines need urgent government action if they are to emerge from this in a fit state to help the world recover, once Covid-19 is beaten," said IATA chief executive Alexandre de Juniac.
"With average cash reserves of approximately two months in the region, airlines are facing a liquidity and existential crisis. Support measures are urgently needed. On a global basis, IATA estimates that emergency aid of up to $200bn is required."
International bookings in Africa are down roughly 20% in March and April, domestic bookings have fallen by about 15% in March and 25% in April, according to the latest data, IATA said.
So far, international bookings in the Middle East were down 40% year-on-year in March and April, 30% year-on-year in May and June. Domestic bookings had fallen roughly 20% in March and April, 40% in May and June.
Middle East airlines had lost $7.2bn in revenue and African $4.4bn at March 11.
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