Abu Dhabi: Middle Eastern carriers face a loss of $19 billion in revenue this year, according to the International Air Transport Association (IATA) as result of travel restrictions that have brought passenger flights to a complete halt in response to the COVID-19 outbreak.
For the UAE, IATA forecasted a drop in 23.8 million passengers and a revenue loss of $5.36 billion for the airline industry risking 287,863 jobs and Dh17.7 billion from the country’s economy, as the group called for urgent government help to rescue airlines.
“To minimise the broad damage these losses will have across the African and Middle East economy, it is vital that governments step up their efforts and come up with the necessary aid for the industry,” said Mohammad Al Bakri, IATA’s regional vice president for Africa and the Middle East during a media video conference.
“IATA is calling for a mixture of direct financial support to the airlines [in the form of] loans, long guarantees, support for corporate bond market and tax reliefs,” he added.
Al Bakri said airlines in the region were also at risk of burning through their cash reserves within the next three months without direct government support.
“Globally we estimate that airlines may burn through $61 billion of their cash reserves during the second quarter while posting a quarterly mid loss of $39 billion.
“The best airlines in Africa and the Middle East have between one to three months of cash reserves depending on their operation and financial operation,” he said.
Al Bakri said Dubai’s recent announcement of coming to the support of Emirates was a positive step and called on others to follow suit.
“Dubai coming out and pledging support to Emirates a hundred per cent [is positive]; and that is because of the understanding that the continuity of air travel, air travel companies and air travel industries is a must for the survival of the economies of the world.
“We hope that all airlines in the Middle East and Africa [receive] the type of help we stipulated… we’ve made that very clear it’s a must for the survival… of each and every airlines throughout the world,” he added.
Limited Emirates flights
Commenting on the resumption of Emirates starting limited outbound flights from April 6, Al Bakri said the move was another positive step for the industry.
“This is up to the airlines and off course they are guided by the recommendations and guidelines from their health authorities and their own risk assessment.
“It’s a positive sign and we hope to see more and more of this, a reversal of the current situation to stop the current bleeding of the airlines,” he added.