Airlines around the world are set to lose $252 billion in passenger revenues this year as Covid-19 continues to obliterate what is left of demand for air travel, according to The International Air Transport Association (IATA).
Middle East-based carriers, which have already lost $7.2 billion, could lose as much as $19 billion in revenues.
IATA’s latest global estimate is more than double its forecast made at the beginning of March, which predicted a $113 billion loss.
“For airlines, it’s apocalypse now,” said Alexandre de Juniac, IATA’s director general, who said there is a shrinking window for governments to throw the industry a lifeline of financial support.
He told reporters on Tuesday that the industry is in a liquidity crisis and in “desperate” need of cash and direct financial help from governments.
“We need massive action very quickly, urgently,” said Mr de Juniac. “We have a liquidity crisis coming at full speed...we desperately need some cash.
“We need governments to act fast to avoid the liquidity crisis. We are working hard to survive, we need government help. We have the people, equipment, experience, but we don’t have enough money.”
Demand for global air travel is expected to nosedive by nearly 40% this year if borders remain closed for the next three months.
IATA has lobbied several times in the last few weeks for governments to include airlines as a priority in their financial aid packages.
Mr de Juniac said that the consequences of Covid-19 on the airline industry go beyond tens of thousands of job losses and will impact heavily on the global economy.
Several major airlines have begun laying off staff in an effort to conserve cash as more and more flights are suspended.
A number of countries, including the UAE, have banned all commercial flights, leaving two of the world’s largest carriers, Emirates and Etihad, grounded.
“If the situation continues we will have companies that go bankrupt,” said Mr de Juniac.
European regional airline, Flybe, which was already facing serious financial difficulties, was the industry’s first virus victim.
IATA’s chief economist, Brian Pearce, said: “Hundreds of airlines are breaking even or making losses so they are very fragile in the face of this cash flow shock.
“Europe is a focus of extraordinary pressure with border closures and the fact we expect to see capacity down 90% or more in Q2 I’d say airlines in that region are most at risk at the moment.
“This liquidity crisis is affecting the strong as well as the weak. The priority is to make sure the industry is in fit enough condition to serve a recovery period because air transport is so important for the modern economy.”
Mr Pearce said that a recovery in demand for global air travel will take longer than the 2003 SARS crisis and warned of a “deep” recession.