Revenue Losses Mount, More Jobs At Risk: IATA

A growing number of jobs are at risk as European airlines report increasing revenue losses as passenger traffic continues to drop.

Calling for urgent government action to preserve air services, IATA says that the potential revenue loss by European carriers in 2020 has grown to $89 billion and passenger demand (measured in Revenue Passenger Kilometers) is projected to be 55% below 2019 levels.

Previous estimates by IATA – released March 24 – showed revenue losses of $76 billion and a passenger demand drop of 46%.

Overall, IATA is estimating that the present 90% collapse in air traffic puts around 6.7 million jobs at risk and could lead to a negative GDP impact of $452 billion across Europe. This equates to an additional 1.1 million jobs and $74 billion in GDP over the March estimates of 5.6 million jobs and $378 billion.

The increasing risk to jobs and GDP is due to a greater impact than previously expected from the air travel restrictions introduced as a result of the COVID-19 pandemic.

And IATA’s new analysis is based on a scenario of severe travel restrictions lasting for three months, with a gradual lifting of restrictions in domestic markets, followed by regional and intercontinental travel.

At the national level, those impacts include:

• United Kingdom — 140 million fewer passengers resulting in a $26.1bn revenue loss, risking almost 661,200 jobs and around $50.3bn in contribution to the UK economy.
• Spain — 114 million fewer passengers resulting in a $15.5bn revenue loss, risking 901,300 jobs and $59.4bn in contribution to Spain’s economy.
• Germany — 103 million fewer passengers resulting in a $17.9bn revenue loss, risking 483,600 jobs and $34bn in contribution to Germany’s economy.
• Italy — 83 million fewer passengers resulting in a $11.5bn revenue loss, risking 310,400 jobs and $21.1bn in contribution to Italy’s economy.
• France — 80 million fewer passengers resulting in a $14.3bn revenue loss, risking 392,500 jobs and $35.2bn in contribution to France’s economy.

IATA says that it’s essential governments move quickly to minimize this economic damage. Among the first priorities should be direct financial support, loans and tax relief to airlines. Regulatory relief is also crucial, especially a temporary amendment to EU261 to give greater flexibility on the terms of repayments for cancelled flights.

Rafael Schvartzman, IATA’s regional vice-president for Europe, said that: “Every job created in the aviation industry supports another 24 jobs in the wider economy. Unfortunately, that means that when aviation jobs disappear, the impact is magnified across the economy. Our latest impact assessment shows that the number of jobs at risk has increased to 6.7 million across Europe. As airlines face an unprecedented liquidity crisis, we desperately need European government financial and regulatory support.”

Schvartzman observed that: “The world will rely on airlines and air connectivity to restore the global economy. A successful restart of the industry will be crucial. To help with that, IATA is hosting a series of regional summits to bring governments and key stakeholders together, to maximize the chances of an orderly restart. Harmonization and coordination of measures will be vital. And as always, we will be led by the science in terms of what can be implemented effectively.”