Airlines in the Asia Pacific are expected to see the largest revenue drop and a 50% fall in passenger demand for the year compared to 2019, the International Air Transport Association(IATA) said.
Globally, airline passenger revenues are expected to drop by $314 billion in 2020, resulting in a 55% on-year decline.. Those estimates from IATA assume that severe travel restrictions due to the pandemic last for three months, with a gradual lifting of measures.
“The situation is deteriorating. Airlines are in survival mode. They face a liquidity crisis with a $61 billion cash burn in the second quarter,” Conrad Clifford, regional vice president for Asia Pacific at IATA, said in a statement.
Virgin Australia recently became Asia Pacific’s first major airline to enter third-party restructuring.
Clifford said if governments do not intervene to make sure airlines have “sufficient cash flow” to tide them over this period, then more carriers could go a similar way.
“Providing support for airlines has a broader economic implication. Jobs across many sectors will be impacted if airlines do not survive the COVID-19 crisis,” Clifford said. “Every airline job supports another 24 in the travel and tourism value chain.”