Region's airlines received $4.8bn in government aid in 2020; despite this, several Mideast airlines remain at risk of bankruptcy or business administration, says International Air Transport Association
Middle East airlines posted losses of $7.1bn in 2020; a loss of $68.47 for each passenger flown, IATA said and noted that with traffic at less than 20% of 2019 levels, the cash burn continues even with severe cost-cutting.
Airlines in the region received $4.8bn in government aid in 2020, the International Air Transport Association said. Most of this support ($4.1bn) was distributed through direct cash injections. Despite this, several airlines in the Middle East remain at risk of bankruptcy or business administration, it said.
IATA called upon governments in the Middle East to develop re-start plans to safely re-link their citizens, businesses and economies to global markets when the Covid-19 epidemiological situation permits.
IATA also called for regional coordination to ensure that the plans can be efficiently implemented and urged governments to remain vigilant about the industry’s financial situation.
“Re-establishing air connectivity will energise the economic recovery from Covid-19. With millions of jobs at risk from the prolonged shutdown, not a day should be lost once the epidemiological situation enables a re-opening. Restarting safely after a year or more in lockdown will need careful preparations. At the national level it is important that governments work with industry, so everyone understands the benchmarks that need to be achieved to facilitate the lifting of travel restrictions. And at the regional level, where traffic is expected to ramp-up first, it is critical that governments are talking to each other so that all parties are aligned and ready for a restart,” said Kamil al-Awadhi, IATA regional vice president (Africa and the Middle East).
IATA data shows January air passenger traffic in the region was down 82.3% compared to January 2019. The ongoing crisis puts over 1.7mn jobs in the Middle East and $105bn in GDP at risk.
“This is a unique situation. But we have good practices to rely on. Safety is the top priority for anything associated with aviation. That is because governments have long established global best practices for working together with industry and with each other. This same approach will help the re-start. There are two ends to every route. Both must be prepared or the restart cannot happen,” said al-Awadhi.
He said, “A financially viable air transport sector will be needed to energize the recovery. Government relief for airlines has avoided massive failures that would jeopardise a restart. This has not been uniform across the region. With no clear timeline to recovery the situation is far from resolved.
“Governments that have provided relief will need to be prepared for more. And governments that have not yet stepped-up must recognise the growing risk to their economies as the crisis drags on.”