Not for the first time, the International Air Transport Association (IATA) has called upon governments around the world to help save the aviation industry. While governments have already given considerable funding in various forms (and the IATA recognises this – “Government support of US$173 billion has helped many survive," said Alexandre de Juniac, IATA’s Director General and CEO), the organisation insists that more can still be done to help pull many airlines out of heavy debt – and certain collapse.
But with borders looking likely to reopen in 2021 with the promise or Covid vaccines, all is not lost. Still, the IATA notes that people will need encouragement to get flying again.
“Assuming borders re-open by mid-2021, the industry will only lose $38.7 billion in 2021. Now is the time for governments to step up. The $173 billion of support provided to date has enabled the industry to survive, but more is required to carry the industry through to next summer,” de Juniac said.
He added: “IATA has identified a range of market stimulation options that will support the viability of air routes while encouraging people to travel. Without aviation’s $3.5 trillion contribution to global GDP, there can be no broader economic recovery.”
Five measures to help restore the aviation industry
As such, the IATA recommends that governments consider the following five measures:
- Temporary waivers or suspensions of government charges, taxes and fees to reduce flight costs and lower travel costs for passengers
- Route subsidies for flights to local/regional destinations to support connectivity for rural communities and business
- Financial incentives in the form of rewards for operating flights, or seats flown, which can support airlines while load factors or yields are too low
- Advance ticket purchases that governments can use for future trips or distribute to the travelling public in the form of vouchers to support travel and tourism
- Passenger travel subsidies in the form of vouchers for passengers or as a percentage cash-back on overall travel costs
Airlines to lead the economic recovery
“Financially viable airlines will be needed to lead the economic recovery from the depths of the Covid-19 crisis,” insisted de Juniac. “With potential to safely re-open borders and revive travel with testing, governments will need to add measures that stimulate demand. Such targeted initiatives will help generate revenues, avoid adding debt to airlines, and immediately generate economic activity across the value chain.” He added that a ‘robust economic recovery’ needs people to start travelling again.
Already, airlines have began adjusting their offerings to help entice customers back. And flexible ticket and booking options, such as that offered by Lufthansa, seem to be a staple move for the industry. Covid-19 has shaken travellers’ confidence in travel, both from a financial standpoint and a public health point of view.