Indian airlines may suffer $11.2 bn revenue loss, 2.9 mn jobs at risk: IATA

Airlines in India are likely to suffer a revenue loss of 11.2 billion dollars this year leading to 2.9 million jobs at risk as passenger demand falls by 47 per cent due to COVID-19 crisis, the International Air Transport Association (IATA) said on Friday.

The latest estimates from IATA indicate a worsening of the country impact from coronavirus pandemic and travel restrictions in the Asia Pacific region.

On April 14, IATA released an updated analysis showing that the COVID-19 crisis will see global airline passenger revenues drop by 314 billion dollars in 2020, a 55 per cent decline compared to 2019.

Airlines in the Asia Pacific will see the largest revenue drop of 113 billion dollars in 2020 compared to 2019 (minus 88 billion dollars in March 24 estimate) and a 50 per cent fall in passenger demand compared to 2019 (minus 37 per cent in 24 March estimate).

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.

"The situation is deteriorating. Airlines are in survival mode. They face a liquidity crisis with a 61 billion dollars cash burn in the second quarter," said Conrad Clifford, IATA's Regional Vice President for Asia-Pacific.

"We have seen the first airline casualty in the region. There will be more casualties if governments do not step in urgently to ensure airlines have sufficient cash flow to tide them over this period," he said in a statement.

Clifford identified India, Indonesia, Japan, Malaysia, the Philippines, South Korea, Sri Lanka and Thailand as priority countries that need to take action. In India, passenger demand in 2020 is estimated to fall by 47 per cent to 89.7 million.

IATA called for a combination of direct financial support, loans, loan guarantees and support for the corporate bond market, and tax relief.

"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," said Clifford.

"Every airline job supports another 24 in the travel and tourism value chain. In the Asia Pacific, 11.2 million jobs are at risk, including those that are dependent on the aviation industry such as travel and tourism," he said.

Increased risk to jobs as European airline revenues collapse: IATA

The potential revenue loss by European carriers in 2020 has grown to 89 billion dollars and passenger demand measured in revenue passenger kilometres) is projected to be 55 per cent below 2019 levels, according to the International Air Transport Association (IATA).

This is an increase over the previous estimates released on March 24 of 76 billion dollars and 46 per cent respectively.

"Overall, we estimate that the present 90 per cent collapse in air traffic puts around 6.7 million jobs at risk and could lead to a negative GDP impact of 452 billion dollars across Europe. This equates to an additional 1.1 million jobs and 74 billion dollars in GDP over the March estimates of 5.6 million jobs and 378 billion dollars," said the latest IATA analysis.

The increasing risk to jobs and GDP is due to a greater impact than previously expected from the air travel restrictions introduced as a result of the COVID-19 pandemic.
IATA's new analysis is 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 travel. Some of the impacts at the national level include:

United Kingdom: 140 million fewer passengers resulting in a 26.1 billion dollars revenue loss, risking almost 661,200 jobs and around 50.3 billion dollars in contribution to the UK economy.

Spain: 114 million fewer passengers resulting in a 15.5 billion dollars revenue loss, risking 901,300 jobs and 59.4 billion in contribution to Spain's economy.

Germany: 103 million fewer passengers resulting in a 17.9 billion dollars revenue loss, risking 483,600 jobs and 34 billion in contribution to Germany's economy.

Italy: 83 million fewer passengers resulting in an 11.5 billion revenue loss, risking 310,400 jobs and 21.1 billion in contribution to Italy's economy.

France: 80 million fewer passengers resulting in a 14.3 billion revenue loss, risking 392,500 jobs and 35.2 billion in contribution to France's economy.

The 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 USD 11.221 billion (over Rs 85,000 crore)

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