The international association has renewed its call on governments to assist airlines through the COVID-19 induced downturn, by “no later than” 31 July.
As reported last week, the International Air Transport Association has warned that the airline industry faces “a hard winter” ahead, due to the anticipated largely reduced flight capacity over the upcoming summer season, which will be unable to offset the seasonal winter lull.
As such, the international association has renewed its call on governments around the globe to continue providing relief measures to aviation services, stipulating that these provisions be provided by “the end of July”, to provide aviation services with certainty.
According to the IATA, airlines are collectively expected to post a loss of $84.3 billion in 2020, further validating the need for worldwide government financial relief.
The IATA highlighted that the combination of procedural reform and debt-free government assistance will both be required in order to save the world’s airline industry.
This includes extending the waiver on the 80-20 ‘use it or lose it’ rule in the Worldwide Airport Slot Guidelines into the northern hemisphere’s winter season, essentially into 2021.
The association highlighted that during the unprecedented decline in international and domestic travel demand, airlines need “much more flexibility” to plan flight schedules and make critical business decisions in line with demand.
For this reason, the IATA believes airlines should not be held to slot allocation guidelines that were created and enforced under “normal operating circumstances”.
“There were good reasons why the 80-20 rule was waived for the summer season. Regulators should apply the same common-sense approach again and waive the rule for the winter season as well,” IATA chief executive Alexandre de Juniac said.
“Airlines need to focus on meeting what consumers want today, without trying to defend the slots needed for what their schedule might look like a year from now.”
The IATA also argued that airlines need continued financial assistance from governments that “do not increase industry debt levels”, which have risen sharply since the start of the pandemic.
“Some governments are exploring measures including subsidising domestic operations, and waiving airport and air traffic control charges,” the association noted.
Governments are also urged to extend wage subsidies and corporate taxation relief measures available to the aviation industry.
Wage subsidy schemes have provided at least $35 billion in relief to airlines, and extensions would provide companies with more time to recover, and minimise job losses, argued the IATA.
Relief for corporate and indirect taxes such as VAT, passenger taxes or fuel taxes would also support market stimulus, the association said.
Finally, increases in charges and fees imposed on airlines should be avoided until the industry can collectively recover from steep declines in revenue.
Included in this recommendation is the note that governments should cover the cost of new and ongoing health measures imposed on airlines as a result of COVID-19.
“Each day sees more people traveling. That’s good for the economy. The numbers are moving in the right direction, but we are by no means anywhere near normal or sustainable levels of activity,” de Juniac concluded.
“Financial relief measures are still desperately needed. And policy-relief measures like a slot usage waiver remain critical.
“Governments need to grant that by no later than the end of July to provide at least that certainty for this beleaguered and battered industry.”
