European airlines are most at risk from the Covid-19 crisis with the UK market alone expected to lose more in revenues this year than the entirety of the Middle East region.
That is the latest warning from the International Air Transport Association (IATA) which has called for urgent action from European governments to offer direct financial aid to carriers.
Carriers in Europe could lose as much as $76 billion in turnover this year with passenger demand projected to plummet by 46% compared to 2019.
With 113 million fewer passengers, the UK market is facing a $21.7bn revenue loss, risking almost 402,000 jobs according to IATA.
The Middle East region as a whole is projected to lose around $19 billion this year as a result of the virus crisis.
IATA has warned of a $15 billion loss in Germany, $13 billion in Spain, $12 billion in France and $9.5 billion in Italy.
Europe has already lost its largest regional carrier, Flybe, to the impact of coronavirus. Although the airline was already in poor financial shape and narrowly avoided collapse just before Covid-19 made its way to the continent.
“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,” IATA’s chief economist Brian Pearce said on a media call earlier this week.
Rafael Schvartzman, IATA’s regional VP for Europe, said that the airline industry is “an economic engine” and that governments must recognise the importance of supporting the sector.
“First, this will keep airlines financially viable during the present lockdown, preserving jobs, maintaining essential connections to repatriate citizens, and carrying life-saving air cargo supplies,” he said.
“Secondly, this would avoid broad economic damage by ensuring that airlines can rapidly scale-up operations when travel restrictions are lifted, jump-starting the European and global economies.”
In addition to financial support, IATA called for regulators to provide relief measures including allowing airlines to offer vouchers instead of refunds.