KUALA LUMPUR: Airlines face a real risk of bankruptcy if, according to the International Air Transport Association (IATA), they do not obtain direct financial support from the government.
Asia-Pacific Regional Vice-President Conrad Clifford said that the global aviation industry, including Malaysia, is in dire condition. However, that financial relief initiatives could help sustain airlines and prevent major job losses supported by the industry.
He said that in order to reach maximum growth potential, costs such as airport tax, air navigation service provider fees and fuel charges across the supply chain should be kept low for airlines.
We call on governments to intervene because as we move into 2021. There is a real risk that airlines will fail, especially medium and smaller carriers.
“We need direct assistance from carriers as quickly as possible”. He said at today’s media briefing on the effect of the pandemic on the Asia-Pacific aviation market.
Clifford noted that, relative to cross-border consolidation, airline consolidation within the same country was more likely to occur due to differences in rules and regulations.
In the meantime, Vinoop Goel, IATA Regional Director of Airports and External Relations for Asia-Pacific, said the net losses of Asia-Pacific airlines are projected to be reduced to US$7.5 billion (RM30.6 billion) compared to an estimated US$31.7 billion this year.
There would be some growth in the number of passengers. However the recovery in 2021 would not be able to offset the decline in 2020, he said.
Compared to long-haul routes, the short and medium-haul markets with less than 5,500 km of routes would produce a faster recovery. He said, adding that reopening the border with testing instead of quarantine would be the key to enabling travel.
IATA is a trade organisation representing airlines from around the world.