Threat to MENA aviation industry rises to $24bn
The IATA has updated its projections for the region’s losses amid the pandemic
The International Air Transport Association (IATA) has renewed its call for government support as the COVID-19 pandemic continues to batter the aviation industry in MENA and globally. IATA has been monitoring the virus’s impact on the industry for several months, continuously updating its estimations as the situation worsens. In its latest report, it has said the region’s airlines could see greater losses to jobs, revenues and traffic than previously expected, resulting in a sizable hit to the region’s GDP.
Projections point towards US$24 billion passenger revenue being lost compared to last year; $5 billion more than expected at the start of April. Job losses in aviation and related industries could climb as high as 1.2 million the region, while full-year traffic is expected to fall by 51% compared to 2019. As a result, GDP supported by aviation could fall by $66 billion this year, $15 billion more than previously thought.
IATA regional VP for MEA Muhammad Al Bakri explained: “Airlines in the Middle East continue to be battered by the impact of COVID-19. Passenger traffic has all but ground to a halt and revenue streams have evaporated. No amount of cost cutting will save airlines from a liquidity crisis. The collapse of air transport will have devastating effects on countries’ economies and jobs. And in a region where aviation is a key pillar of many nations’ economies the effect will be much worse. Direct financial support is essential to maintain jobs and ensure airlines can remain viable businesses.”
Country by country, KSA and UAE are set to deal with the greatest losses. The full list is below:
35 million fewer passengers resulting in a US $7.2 billion revenue loss, risking 287,500 jobs and $17.9 billion in contribution to Saudi Arabia’s economy
31 million fewer passengers resulting in a US $6.8 billion revenue loss, risking 378,700 jobs and $23.2 billion in contribution to UAE’s economy
13 million fewer passengers resulting in a US $2.2 billion revenue loss, risking 279,800 jobs and$3.3 billion in contribution to Egypt’s economy
11 million fewer passengers resulting in a $1.7 billion revenue loss, risking 499,000 jobs and $4.9 billion in contribution to Morocco’s economy
Two million fewer passengers resulting in a $1 billion revenue loss, risking 24,100 jobs and $1.6 billion in contribution to Kuwait’s economy
Eight million fewer passengers resulting in a US $0.8 billion revenue loss, risking 169,800 jobs and $3.1 billion in contribution to Algeria’s economy
Three million fewer passengers resulting in a $0.6 billion revenue loss, risking 92,700 jobs and $1.2 billion in contribution to Tunisia’s economy
Three million fewer passengers resulting in a $0.7 billion revenue loss, risking 51,500 jobs and $1.7 billion in contribution to Oman’s economy
“As governments struggle to contain the COVID-19 pandemic, an economic catastrophe has unfolded. Re-starting aviation and opening borders will be critical to the eventual economic recovery. Airlines are eager to get back to business when and in a way that it is safe. But starting up will be complicated. We need to make sure that the system is ready, have a clear vision of what is needed for a safe travel experience, establish passenger confidence and find ways to restore demand. Cooperation and harmonisation across borders will be essential to restart aviation,” said Al Bakri.
As with its other estimations, the figures are based upon the prediction that travel restrictions are upheld for a three month period.