IATA: 50% airlines globally might go bankrupt
The International Air Transport Association, IATA, says airlines globally are burning cash and accumulating debts without operations due to the Covid-19 pandemic.
This is just as the International body says if financial help fails to come before the end of June, 50% of airlines will become insolvent. It is against this backdrop that IATA’s Director, Advocacy and Strategy, Africa, Funks Adeyemi speaking at a virtual meeting organized by stakeholders in the industry, with the theme:”Flying into Turbulent Skies, Safely Navigating Covid-19 Headwinds – Survival Strategies for Nigerian Aviation”, says IATA is working assiduously to get Head of States and organizations to give the needed financial assistance to the global airlines.
She added that their analysis recently revealed that if by the end if July airlines do not get financial support in form of direct cash injection and about 50% globally about 90% will become insolvent.”Am talking globally now, because this thing has affected all airlines, that means African airlines and Nigerians airlines as well and in this situation too.”
IATA Adeyemi noted estimates that for 2020 the industry is going to record a loss of about $400billion, adding that this was an industry just trying to maintain a balance from a very high cost and tiny margin before the pandemic.
“This a real cataclysmic event in aviation, the airlines are burning cash even though they are not flying, they still have to spend, maintain their aircraft, maintain so many of their machinery and there is still a lot of money still being burnt and we estimate that about $60billion a quarter.”
Because of this negative impact of the coronavirus pandemic, the international body says, it has sent out letters some personally written by its Director General to Heads of States calling for assistance for the airlines to survive.
The IATA’s Director says, “And I personally drafted almost 50 letters to all the African States and the Ministries of Transports, Ministries of Finance and some cases we got our Director General to write letters to Presidents and Heads of States of at least half of the African countries.”
