The International Air Transport Association (IATA) has called on governments to subsidise routes, waive taxes and to invest in measures to incentivise people to travel in order to keep aviation financially viable.
The airline body recognises that governments have given some US$173 billion (£129 billion) already in various forms of financial support but says further stimulus is required as support packages run out and the industry has racked up debts of US$651 billion (£487 billion).
IATA says there are five ways that governments can help stimulate the air travel market while avoiding adding more debt to already highly leveraged airline balance sheets:
• Temporary waivers or suspensions of government charges, taxes and fees to reduce flight costs and lower travel costs for passengers;
• Route subsidies for flights to local/regional destinations to support connectivity for rural communities and business;
• Financial incentives in the form of rewards for operating flights, or seats flown, which can support airlines while load factors or yields are too low;
• Advance ticket purchases that governments can use for future trips or distribute to the travelling public in the form of vouchers to support travel and tourism;
• Passenger travel subsidies in the form of vouchers for passengers or as a percentage cash-back on overall travel costs.
“Financially viable airlines will be needed to lead the economic recovery from the depths of the Covid-19 crisis. Government support of US$173 billion has helped many survive," said Alexandre de Juniac, IATA’s director general and CEO.
“With potential to safely re-open borders and revive travel with testing, governments will need to add measures that stimulate demand. Such targeted initiatives will help generate revenues, avoid adding debt to airlines, and immediately generate economic activity across the value chain.
“A robust economic recovery needs people to start travelling again. Every job in aviation supports a further 29 jobs, demonstrating the broad impact that re-connecting the world will have. There are many good ideas out there. Any government stands to benefit by including proven stimulus measures into their economic recovery plans. When people travel, economies prosper and grow,” said de Juniac.