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Flight attendants pose with a model of their new 787-9 and the real aircraft behind them at the 2019 Paris Air Show. (Photo: AirlineGeeks | William Derrickson)

IATA Warns COVID-19 Threatens 25 Million Jobs Worldwide

The International Airlines Transport Association (IATA) has warned stakeholders that the Coronavirus crisis threatens 25 million direct and indirect jobs surrounding the airline industry worldwide; as governments across the world have restricted movement and even called for the suspension of commercial operations as the world unites to slow the spread of COVID-19.

In a statement released today, IATA highlighted the severity of COVID-19’s impact on the global airline and travel industry in general. As the world is pretty much immobile, the organization believes that traffic plunges throughout the first quarter of the year, plus factoring in for a slow recovery throughout the rest of the year could risk 25 million jobs. This accounts for jobs directly employed by airlines as well as other indirect jobs throughout the air travel supply chain, which bring the figures up.

So far, IATA warns that more than 30 percent of the 2.7 million people directly employed by airlines worldwide have been temporarily suspended or laid off. The organization also expects this year’s passenger revenues to drop by 44 percent on average, according to FlightGlobal.

As global capacity has been slumped by 70 percent, airlines are using all cash reserves to stay afloat. In this way, IATA has pledged governments for state aid, tax deferrals and lower charges, in order to protect a sector that is essential for the world.

This becomes an increasing necessity, as airlines become aware, they could face many months without generating liquidity and the risk of bankruptcy becomes imminent unless provided with cash to keep the engines running until traffic levels recover.

In this way, airlines are actively giving out expenditure credits for canceled flights to be used at a later date, while avoiding refunds if possible as this would consume airline’s cash reserves instead of being used to cover payroll costs or grounding costs for aircraft to put an example.

IATA has raised this point, by expressing discontent with the U.S.’s DOT decision to oblige airlines to refund unused tickets, arguing that it would simply not be possible for some airlines to do so.

Jose Antonio Payet
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Jose Antonio Payet
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