More bad news for Middle East airlines
Each week of inactivity raises the forecasts of future losses and jobs with it
Abu Dhabi: With each passing week of enforced service disruption, Middle East airlines face a revenue loss of $24 billion and up from the $19 billion.
For the UAE, IATA’s updated forecasts estimate a $6.8 billion loss for the industry and putting at risk 378,678 jobs as well as a GDP loss of $23.24 billion.
This is according to the International Air Transport Association (IATA), which has repeated its call for urgent government action to safeguard airlines.
“Prolonging these decisions will [put at] risk more and more of these airlines… as they are burning through their cash reserves," said Mohammad Ali Al Bakri, IATA’s regional vice-president. "We have said it before - at best airlines in the region have two to three months of cash reserves and they are burning through these cash reserves very fast.
“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.”
Make the switch gradually
Al Bakri said that any agreement to relaunch services would have to be implemented gradually and to scale. “The restrictions started very gradually… and so similarly they will also be lifted slowly,” he added.
“If the UAE for example wants to start flights to a certain country, they would have to know that country’s requirements and if they are ready to take in flights or not. And those requirements would also differ from country to country.”
“We believe restrictions can be lifted starting with domestic operations, then moving to bilateral agreements between countries, followed by regional agreements and then expanding internationally.