On March 26 the International Air Transport Association (Iata) addressed an appeal, on behalf of the global airline industry, to the leaders of the Group of 20 leading economic powers (G20). The G20 members together accounted for some 85% of the world’s gross domestic product, more than 75% of global trade and 66% of the world’s population, reported India Today.
The members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, (South) Korea, Mexico, Russia, Saudi Arabia, South Africa, the UK, the US, and the European Union. Their leaders held an extraordinary global videoconference about the Covid-19 pandemic and its impacts, also on March 26.
In an open letter, Iata pointed out that travel restrictions and border closures ordered by governments had destroyed the demand for air travel. They had also imposed “unprecedented” strains on world markets and created profound concern for the future of the global economy.
“Air transport services are going to be essential to facilitate the recovery of the global economy from the Covid-19 pandemic,” stated the association in its letter. “The rapid connections between cities are essential to the modern economy, sustaining global supply chains, as well as developing country industries such as perishable horticulture and tourism. 35% of international trade is flown by air, 57% of international tourists travel by air and each airline job contributes to 24 more in the wider economy.”
Iata assured the G20 leaders that the world’s airlines were doing their utmost to cut their avoidable costs. However, they had heavy fixed expenses that could not be cut. Additionally, because of the deepening of the crisis, a large number of airlines have been having to spend more on refunds than they were accruing from new booking revenues. The average airline had just two months of cash reserves and these were being rapidly depleted.
“As the global trade association for the air transport industry representing 290 members and 82% of global air traffic, we have estimated the cash shortfall globally at approximately $200-billion,” said Iata. “As the world’s premier forum for economic cooperation, the G20 is uniquely positioned to demonstrate leadership and encourage governments around the world to act quickly to prevent irrecoverable damage to international connectivity.”