Current Aid Insufficient To Carry Industry Through Crisis, IATA Says

FRANKFURT—IATA sees the need for further government financial assistance as airlines continue to suffer amid sluggish air travel recovery. 

“The initial round of measures will need to be topped up,” IATA director general and CEO Alexandre de Juniac said Sept. 1. But de Juniac made clear that “the debt burden cannot be increased.”

Governments have injected around $123 billion into the global airline industry since the beginning of the COVID-19 pandemic, according to an earlier IATA summary. The support—where it was made available—has helped avoid mass insolvencies of airlines. Yet, IATA now says the support will not be sufficient to carry the industry through the prolonged crisis. 

The industry body is not specifically asking for direct grants but support in different forms, including route-specific subsidies, cash aid or cost relief. “There is a multitude of ways to help airlines,” IATA SVP member and external relations Sebastian Mikosz said.

The call for more help comes after a July that chief economist Brian Pearce described as “disappointing.” Traffic levels were below what IATA had included in its forecast and there is further “downside risk” in the coming months.

According to IATA, July traffic came in at 79.8% below last year’s level whereas airlines offered 70.1% less capacity. The combination of low traffic and excess capacity led to an all-time-low load factor of 57.9% for the industry. Asia-Pacific had recovered the most to a decline of 72.2% whereas demand in North America was still down 80.6% and 81.3% in Europe.

IATA did notice some significant recovery of a few domestic markets, particularly domestic China, which was 28% below 2019 levels in July and pointed at some encouraging trends in the global economy at large. However, “aviation remains effectively in lockdown,” according to de Juniac, as airlines battle restrictions on international travel. De Juniac criticized government management of travel restrictions as “so uncoordinated and unpredictable that people are not flying.”

The industry body urges governments to implement ICAO guidelines globally, reopen borders and implement an effective system of COVID-19 testing that ensures passengers can feel safe when traveling and limits the re-import of cases to a manageable and very low number.

IATA also urged the EU to suspend the 80/20 slot rule for the upcoming winter season. “Europe underestimates the challenge and is dragging its feet,” de Juniac said.