Call for governments to soften COVID-19 Impact
The International Air Transport Association (IATA) renewed its call for government relief measures as the impacts of the COVID-19 crisis in MENA deepen.
The region’s airlines could lose $24 billion of passenger revenue compared to 2019. That is $5 billion more than was expected at the beginning of the month.
Job losses in aviation and related industries could grow to 1.2 million. That is half of the region’s 2.4 million aviation-related employment. Previous estimate was 9 million.
Full-year 2020 traffic is expected to plummet by 51% compared to 2019. Previous estimate was a fall of 39%.
GDP supported by aviation in the region could fall by $66 billion from $130 billion. Previous estimate was $51 billion.
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.
Muhammad Al Bakri, IATA’s Regional Vice President for Africa and the Middle East said: “Airlines in the Middle East continue to be battered by the impact of COVID-19. Passenger traffic has all but ground to a halt and revenue streams have evaporated.
"No amount of cost cutting will save airlines from a liquidity crisis. The collapse of air transport will have devastating effects on countries’ economies and jobs. And in a region where aviation is a key pillar of many nations’ economies the effect will be much worse.
"Direct financial support is essential to maintain jobs and ensure airlines can remain viable businesses.”
Some of the impacts at national level include:
Saudi Arabia 35 million fewer passengers resulting in a $7.2 billion revenue loss, risking 287,500 jobs and $17.9 billion in contribution to Saudi Arabia’s economy
UAE 31 million fewer passengers resulting in a $6.8 billion revenue loss, risking 378,700 jobs and $23.2 billion in contribution to UAE’s economy
Egypt 13 million fewer passengers resulting in a $2.2 billion revenue loss, risking 279,800 jobs and US $3.3 billion in contribution to Egypt’s economy
Morocco11 million fewer passengers resulting in a $1.7 billion revenue loss, risking 499,000 jobs and $4.9 billion in contribution to Morocco’s economy
Iran 7 million fewer passengers resulting in a $1.8 billion revenue loss, risking 206,900 jobs and US $4.3 billion in contribution to Iran’s economy
Kuwait 2 million fewer passengers resulting in a $1billion revenue loss, risking 24,100 jobs and $1.6 billion in contribution to Kuwait’s economy
Algeria 8 million fewer passengers resulting in a $0.8 billion revenue loss, risking 169,800 jobs and $3.1 billion in contribution to Algeria’s economy
Qatar 8 million fewer passengers resulting in a $1.7 billion revenue loss, risking 70,000 jobs and $2.8 billion in contribution to Qatar’s economy
Tunisia 3 million fewer passengers resulting in a $0.6 billion revenue loss, risking 92,700 jobs and $1.2 billion in contribution to Tunisia’s economy
Oman 3 million fewer passengers resulting in a $0.7 billion revenue loss, risking 51,500 jobs and $1.7 billion in contribution to Oman’s economy
To minimize the broad damage that these losses would have across the Middle East economies, it is vital that governments step up their efforts to aid the industry. IATA is calling for a combination of:
direct financial support
loans, loan guarantees and support for the corporate bond market
In addition to vital financial relief, the industry will also need careful planning and coordination to ensure that airlines are ready when the pandemic is contained.
IATA is scoping a comprehensive approach to re-starting the industry when governments and public health authorities allow. A series of virtual regional summits, bringing together governments and industry stakeholders are taking place this week.
The main objectives will be to understanding what is needed to re-open closed borders, and agreeing on solutions that can be operationalized and scaled efficiently.
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