IATA’s latest analysis also suggests European airlines will lose $89 billion in 2020 with passenger demand 55% below 2019 levels. This will have a negative GDP impact of $452 billion across the continent.
The 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.
Some of the impacts at national level include:
140 million fewer passengers resulting in a $26.1 billion revenue loss, risking almost 661,200 jobs and around $50.3 billion in contribution to the UK economy.
114 million fewer passengers resulting in a $15.5 billion revenue loss, risking 901,300 jobs and $59.4 billion in contribution to Spain’s economy.
103 million fewer passengers resulting in a $17.9 billion revenue loss, risking 483,600 jobs and $34 billion in contribution to Germany’s economy.
83 million fewer passengers resulting in a $11.5 billion revenue loss, risking 310,400 jobs and $21.1 billion in contribution to Italy’s economy.
80 million fewer passengers resulting in a $14.3 billion revenue loss, risking 392,500 jobs and $35.2 billion in contribution to France’s economy.
IATA has called on governments to move quickly to minimize this economic damage. Direct financial support, loans, and tax relief to airlines should all be pursued. Regulatory relief is also crucial, especially a temporary amendment to EU261 to give greater flexibility on the terms of repayments for cancelled flights.
“Every job created in the aviation industry supports another 24 jobs in the wider economy,” said Rafael Schvartzman, IATA’s Regional Vice President for Europe. “Unfortunately, that means that when aviation jobs disappear, the impact is magnified across the economy. As airlines face an unprecedented liquidity crisis, we desperately need European government financial and regulatory support.”
Airlines are also preparing for a restart of air connectivity once restrictions begin to be lifted. A number of requirements for a successful restart have been identified:
- Confidence-building measures to encourage a return to travel. This will mean governments providing economic stimuli, and coordinated measures to ensure that travel is safe
- Governments using the industry’s operational expertise to ensure efficient results
- Global standards with mutual recognition
- Any temporary measures to have a clear exit strategy.
“The world will rely on airlines and air connectivity to restore the global economy,” said Schvartzman. “A successful restart of the industry will be crucial.”