Business Hilights
Tracking Nigeria's Headline Business News Online

COVID-19 shutdown pushing global airlines to induced bankruptcy—IATA

…As S’Africa bans domestic flights from Friday

The International Air Transport Association (IATA) Wednesday averred that many national and leading global international airlines are on the brink of collapse is urgent support from their home governments are not forthcoming.

This as the Government of South Africa in a bid to sustain total lockdown following surge in COVID-19 cases to 709, it has ordered total shutdown of domestic flights effective Friday, March 27, 2020.

There are strong indications that the cost of airspace shutdown may drive potential losses from $113 billion to $252 billion considering general passenger revenue slump worldwide.

World airlines group, IATA is already calling for massive support from home governments of ‘too big to fall airlines’ to provide financial relief to airlines.

Business Hilights Aviation chief reports that IATA, which represents about 290 airlines had already warned that Nigeria was at risk of losing 2.2 million overseas-bound passengers and $434 million of revenue if the COVID-19 (coronavirus) spread continues to escalate.

At the moment, the National Association of Nigerian Travel Agencies (NANTA) had announced loss of over 4000 jobs and N180 billion so far to the pandemic.

In a statement, IATA’s Director-General and Chief Executive Officer (CEO), Alexandre de Juniac, said airlines are currently fighting for survival in every corner of the world including Africa where the disease is shifting its arsenals in the last one week.

de Juniac said “Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business. For airlines, it’s apocalypse now. And there is a small and shrinking window for governments to provide a lifeline of financial support to prevent a liquidity crisis from shuttering the industry.”

IATA’s latest analysis, released earlier in the week showed that annual passenger revenues will fall by $252 billion if severe travel restrictions remain in place for three months. That represents a 44 per cent decline compared to 2019.

This is well-over double IATA’s previous analysis of $113 billion revenue hit that was made before countries around the world introduced sweeping travel restrictions.