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AAPA sees $60B loss for Asian airlines, implores gov’ts to help aviation survive

The Association of Asia Pacific Airlines (AAPA) is calling for immediate government action to save the ailing aviation industry, as it estimates revenue losses of at least US$60 billion this year for Asian airlines due to the adverse effects of the coronavirus disease (COVID-19).

In a March 19 release, AAPA noted how air travel in the Asia Pacific region has “virtually ground to a halt” as a result of the travel bans, border closures, lockdowns, quarantine, isolation orders and other “draconian travel measures” put in place by governments over the past two months.

“Asian airlines are facing revenue shortfalls of upwards of USD60 billion this year as a result of sharp falls in demand which have already forced the grounding of over half of the fleet,” it said.

AAPA added that many of the one million workers employed in the Asia Pacific airline industry are unable to work and facing job loss because of the drastic reductions in operations.

The sharp reductions in passenger services have also drastically reduced available air cargo capacity, affecting critical supply chains, including getting food and medical supplies to affected communities worldwide.

“Asian airlines are continuing to operate dedicated freighter services but need help in streamlining operations, scheduling, and crew clearances to keep critical goods moving as a lifeline,” the AAPA statement said.

The World Health Organisation (WHO) is providing strong leadership in coordinating the global public health response, and notes that this is the first pandemic that can be controlled if all countries and sectors come together, it continued.

“Similarly, we believe that it is time to consider holistic global measures to pave the way for the aviation industry to survive this crisis. Such a global approach is necessary to manage the economic and social impact of the COVID-19 pandemic,” said AAPA.

To deal with the crisis, airlines have been sharply reducing operations and costs while trying to preserve jobs, and actively seeking additional financing from banks and financial institutions.

“Such measures will, however, not be sufficient to guarantee the survival of the aviation sector,” AAPA warned.

It appealed to governments across the globe to take immediate action to provide critical support to those affected. It recommends rapidly implementing emergency relief measures such as:

  • Suspend payroll taxes, defer or reduce income taxes, extend payment terms, and waive ticket taxes & other government levies, taxes, dues and charges for 2020
  • Direct financial support for reduced revenues and liquidity support due to travel restrictions
  • Extend interest-free loans or loan guarantees, and support for corporate bond markets either directly or to commercial banks to extend credit for affected companies
  • Direct financial support for individuals facing loss of livelihoods

AAPA said it “urges all Governments to take immediate action to address the societal impact of the world’s worst public health crisis in a century.”

Photo by chuttersnap on Unsplash

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