The bankruptcy threatens the airline industry

La faillite guette l’industrie aérienne

Photo: Ben Stansall Agence France-Presse
Most of the airlines are seeing 90-95% of their fleet nailed to the ground.

Without an injection of cash fast, 50 % of airlines will be in bankruptcy at the beginning of June, between 80% and 90% at the end of July. Alexandre de Juniac speaks of a crisis unprecedented in its scale. “The industry will shrink and consolidate. “

In the framework of a video conference organized by the Conseil des relations internationales de Montréal, Alexandre de Juniac, director general and ceo of IATA, is back on the financial emergency confronting the industry.

The Association, which has 290 members, claiming 82 % of global air travel, estimates that the crisis threatens 25 million jobs in aviation and the associated value chains, including the tourism sector.

The income of passengers should be lower than us $ 314 billion US $this year, ” is less than half the turnover of 2019 “, and the airlines will spend $ 61 billion of liquidity ” only in the second quarter, while demand plunges by 80% or more.

“A’ normal ‘company sees currently 90 to 95 per cent of its grounded planes,” he says.

To remain viable

Airline companies ask governments to provide immediate financial assistance to help them remain viable and able to lead the recovery when the pandemic will be stemmed.

Like the aid granted to Air France-KLM, Lufthansa or american airlines, the IATA evokes a formula borrowing from the direct financial support, loans and loan guarantees and support for the corporate bond market, as well as tax cuts.

25 million

This is the number of jobs threatened by the crisis in the aviation sector and the value chains
related, according to the evaluation of the IATA.

“We met a hundred governments. They include the stake and the strategic importance of their air industry “, said Mr de Juniac.

Reboot in several phases

The scenario of the IATA put on a recovery plan in several phases, including a reopening of the internal market at the end of may-beginning of June, followed by a relaunch of the continental market in the third quarter and then the market intercontinental in September.

But it is expected that the level of traffic is 50 to 60% lower at the end of December than it was in 2019, with full catch-up somewhere in the end of 2021.

This re-launch will be placed under the seal of the public health security against the threat of the coronavirus. The protocols are updated and procedures are outlined so that the control applies to all stages, from the entrance to the departure terminal at the exit of the arrival terminal.

The risk of contagion

It aims to restore confidence and to minimize, mitigate, or even annihilate, the risk of contagion in order that there is no communication between passengers from one country to the other. “We want the passengers to come back and that the government lift the restrictions. “

Alexandre de Juniac and his team are also continuing discussions with the Organization of international civil aviation and the world health Organization in order to establish a unified process from one country to the other, ” for it to be applicable everywhere in a similar way “.

 

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