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Airline Sector Jobs are on High Risk Due to COVID-19 Crisis: IATA

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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.

“It is essential that governments move quickly to minimise this economic damage,” said IATA. Among the first priorities should be direct financial support, loans and tax relief to airlines.

Regulatory relief is also crucial, especially a temporary amendment to EU261 to give greater flexibility on the terms of repayments for cancelled flights.

Rafael Schvartzman, IATA, COVID-19,
Rafael Schvartzman of IATA

“Every job created in the aviation industry supports another 24 jobs in the wider economy. Unfortunately, that means that when aviation jobs disappear, the impact is magnified across the economy,” said Rafael Schvartzman, IATA’s Regional Vice President for Europe.

“Our latest impact assessment shows that the number of jobs at risk has increased to 6.7 million across Europe. As airlines face an unprecedented liquidity crisis, we desperately need European government financial and regulatory support,” he said in a statement.

While airlines fight for survival, the industry is looking to plan for a restart of air connectivity once restrictions begin to be lifted. A number of requirements to ensure a successful restart have been identified.

Confidence-building measures will be needed to encourage a return to travel. This will mean governments providing economic stimulus and coordinated measures to ensure that travel is safe.

Governments should lean on the industry’s operational expertise to ensure efficient results. Global standards with mutual recognition will be essential for successful implementation. Any temporary measures introduced by governments should be exercised with a clear exit strategy.

“The world will rely on airlines and air connectivity to restore the global economy. A successful restart of the industry will be crucial,” said Schvartzman.

To help with that, IATA is hosting a series of regional summits to bring governments and key stakeholders together, to maximise the chances of an orderly restart. “Harmonisation and coordination of measures will be vital. And as always, we will be led by the science in terms of what can be implemented effectively,” he said.

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SMEStreet is fast growing platform dedicated to entrepreneurs from small and medium sized businesses (SMEs). Committed to facilitate Knowledge & Networking for Business Growth, SMEStreet offers value added content which shows the actual voice of Indian MSMEs.

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