IATA: Airlines face bankruptcy risk without govt financial support

IATA: Airlines face bankruptcy risk without govt financial support
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KUALA LUMPUR (Nov 25): Airlines face a real risk of bankruptcy if they do not receive direct financial support from the government, said the International Air Transport Association (IATA).

Regional vice-president for Asia-Pacific, Conrad Clifford, said the global aviation industry, including Malaysia, was in a dire state, whereby financial relief measures could help sustain airlines and avoid massive losses of jobs supported by the sector.

He said costs such as airport tax, air navigation service provider charges, and fuel fees across the supply chain should be kept low for airlines to achieve full growth potential.

“We call on governments to intervene because there is a real risk that airlines will fail, particularly the medium- and smaller-sized carriers, as we go into 2021.

“We need direct assistance to carriers as fast as possible,” he said during a media briefing on the Covid-19 crisis’ impact on the aviation sector in the Asia-Pacific region today.

Clifford said a consolidation of airlines within the same country would likely happen compared with a cross-border consolidation due to differences in rules and regulations.

Meanwhile, IATA regional director of airports and external relations for Asia-Pacific, Vinoop Goel, said the net losses of Asia-Pacific airlines were expected to narrow to US$7.5 billion (US$1=RM4.09) against US$31.7 billion estimated for this year.

He said although there would be some growth in passenger number, the recovery in 2021 would not be able to compensate for the reduction in 2020.

The short- and medium-haul markets with under 5,500km routes would make a faster recovery compared with the long-haul routes, he said, adding that border reopening with testing instead of quarantine would be the key to enable travel.

IATA is a trade association for the world’s airlines.