The collapse of air transport will have devastating effects on countries’ economies and jobs—IATA regional spokesman
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 US$ 24bn of passenger revenue compared to 2019. That is US$ 5bn 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 2.4mn aviation-related jobs. The previous estimate was 0.9mn.
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 $130 billion. Previous estimate was US$ 51bn.
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.
“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,” commented Muhammad Al Bakri, Regional Vice President, Africa and the Middle East, IATA.
Some of the impacts at national level include:
Saudi Arabia: 35mn fewer passengers resulting in a US$ 7.2bn revenue loss, risking 287,500 jobs and US$ 17.9bn in contribution to Saudi Arabia’s economy.
UAE: 31mn fewer passengers resulting in a US$ 6.8bn revenue loss, risking 378,700 jobs and US$ 23.2bn in contribution to UAE’s economy.
Egypt: 13mn fewer passengers resulting in a US$ 2.2bn revenue loss, risking 279,800 jobs and US$ 3.3bn in contribution to Egypt’s economy.
Morocco: 11mn fewer passengers resulting in a US$ 1.7bn revenue loss, risking 499,000 jobs and US$ 4.9bn in contribution to Morocco’s economy.
Iran: 8.7mn fewer passengers resulting in a US$ 1.8bn revenue loss, risking 206,900 jobs and US$ 4.3bn in contribution to Iran’s economy.
Kuwait: 5.2mn fewer passengers resulting in a US$ 1bn revenue loss, risking 24,100 jobs and US$ 1.6bn in contribution to Kuwait’s economy.
Algeria: 5.8mn fewer passengers resulting in a US$ 0.8bn revenue loss, risking 169,800 jobs and US $3.1 billion in contribution to Algeria’s economy.
Qatar: 4.8mn fewer passengers resulting in a US$ 1.7bn revenue loss, risking 70,000 jobs and US$ 2.8bn in contribution to Qatar’s economy.
Tunisia: 4.3mn fewer passengers resulting in a US$ 0.6bn revenue loss, risking 92,700 jobs and US$ 1.2bn in contribution to Tunisia’s economy.
Oman: 4.3mn fewer passengers resulting in a US$ 0.7bn revenue loss, risking 51,500 jobs and US$ 1.7bn 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
- Tax relief
Looking ahead
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
Understanding what is needed to re-open closed borders, and agreeing solutions that can be made operational and scaled efficiently
“As governments struggle to contain the Covid-19 pandemic, an economic catastrophe has unfolded. Re-starting aviation and opening borders will be critical to the eventual economic recovery. Airlines are eager to get back to business when and in a way that it is safe. Cooperation and harmonization across borders will be essential to restart aviation,” concluded Al Bakri.
