Passenger traffic declines by 47%; revenue impact for airlines at Rs 85,000 crore
The coronavirus pandemic is expected to impact more than 29 lakh jobs in the Indian aviation and dependent industries, global airlines’ grouping IATA has said . Commercial flight services in the country remain suspended till May 3 amid the nationwide lockdown to curb spreading of coronavirus infections.
Besides, the pandemic and subsequent lockdown have significantly impacted economic activities, with aviation and tourism among the worst affected segments. The International Air Transport Association (IATA) said its latest estimates indicate a worsening of the country impact from the COVID-19 crisis in the Asia-Pacific region.
About India, IATA said the pandemic is expected to potentially impact 29,32,900 jobs in the country’s aviation and its dependent industries. The passenger traffic has declined 47 per cent.
Besides, the grouping noted that the revenue impact for airlines operating to and from the Indian market would be $11.221 billion (over Rs 85,000 crore). This refers to the fall in passenger revenue compared to 2019.
The “passenger demand impact (origin destination volumes)” is a fall of more than 8.97 crore. All the figures are for the period of 2020 so far compared to the whole of 2019.
IATA is a grouping of nearly 290 airlines, including Air India, Vistara, IndiGo and SpiceJet. On April 14, IATA said COVID-19 crisis would see global airline passenger revenues drop by $314 billion this year, a fall of 55 per cent compared to 2019.
Airlines in the Asia-Pacific region would record the largest revenue drop of $113 billion in 2020 compared to last year. These estimates are based on a scenario of severe travel restrictions lasting for three months, with a gradual lifting of restrictions in domestic markets, followed by regional and intercontinental, as per IATA. “The situation is deteriorating. Airlines are in survival mode. They face a liquidity crisis with a $61 billion cash burn in the second quarter,” Conrad Clifford, IATA’s Regional Vice President (Asia-Pacific) said.
According to him, India, Indonesia, Japan, Malaysia, the Philippines, Republic of Korea, Sri Lanka and Thailand are priority countries that need to take action.
Further, the grouping called for a combination of direct financial support, loans, loan guarantees and support for the corporate bond market, and tax relief for the airlines industry. “Providing support for airlines has a broader economic implication. Jobs across many sectors will be impacted if airlines do not survive the COVID-19 crisis. Every airline job supports another 24 in the travel and tourism value chain.
“In Asia-Pacific, 11.2 million jobs are at risk, including those that are dependent on the aviation industry, such as travel and tourism,” Clifford said.
MEANWHILE, IATA now forecasts that European carriers will suffer losses in revenue totalling $89 billion in 2020, with the UK accounting for $26.1 billion of this.
The analysis follows this week’s warning from IATA’s CEO Alexandre de Juniac that the introduction of social distancing on aircraft will mean that the end of cheap travel.
The association said that passenger demand is projected to be 55 per cent down on 2019 levels, with the UK seeing 140 million fewer passengers in 2020.
IATA’s forecasted impact of the crisis for Europe’s largest economies
United Kingdom 140 million fewer passengers resulting in a $26.1bn revenue loss, risking almost 661,200 jobs and around $50.3bn in contribution to the UK economy.
Spain 114 million fewer passengers resulting in a $15.5bn revenue loss, risking 901,300 jobs and $59.4bn in contribution to Spain’s economy.
Germany 103 million fewer passengers resulting in a $17.9bn revenue loss, risking 483,600 jobs and $34bn in contribution to Germany’s economy.
Italy 83 million fewer passengers resulting in a $11.5bn revenue loss, risking 310,400 jobs and $21.1bn in contribution to Italy’s economy.
France 80 million fewer passengers resulting in a $14.3bn revenue loss, risking 392,500 jobs and $35.2bn in contribution to France’s economy.