Global airlines could lose 25 million jobs; cannot afford refunds amid coronavirus, says IATA

The IATA said that refunds won't be viable for airlines as they are already cash strapped. Instead, government should come forward and bail them out

The global aviation could lose millions of jobs in the near term as airlines continue to suffer owing to the cancellation of hundreds of flights every day following the coronavirus outbreak. The industry's representative body on Tuesday appealed to governments to come forward and support airline companies to survive the coronavirus travel downturn.

Airlines are one of the worst hit sectors due to the coronavirus pandemic with countries imposing travel restrictions and locking down borders. The International Air Transport Association (IATA) also said that global airlines cannot afford to refund cancelled flights because of the coronavirus crisis as most carriers are already cash strapped.

Airlines brace for tougher times

Airlines Pixabay

Global airlines could lose up to 25 million jobs in the coming days as coronavirus outbreak has left the industry badly bruised. The IATA on Tuesday appealed the governments to come to rescue for the cash strapped airlines or the situation could further worsen due to the coronavirus crisis. Global airline travel declined 70% at the beginning of the second quarter, with hundreds of flights getting scrapped every day and customers cancelling bookings.

The IATA also said that European flights have seen a decline of 90% in the second quarter so far. Per a report by ForwardKeys, owing to the major capacity cuts there has been a 77% decline in global aviation on a year-over-year basis. In the first week of April, international airline seat capacity fell to a meager 23% on a year-over-year basis. Only 10 million seats were in service keeping in mind essential travel compared with 44.2 million a year ago.

Refunds not viable

Airline timetable
Flight timetable Pixabay

IATA also said that global airlines cannot afford to refund cancelled flights because of the coronavirus outbreak, as the companies are already cash strapped. IATA also said that one-third of global airline employees have already lost their jobs or have been furloughed.

IATA's comments come after The US Department of Transportation (DoT) last week issued a notice to airlines to give customers refund immediately if flights get cancelled or significantly delayed amid the coronavirus outbreak. DoT had said that it has been receiving complaints from airline customers asking for refunds. Customers have been complaining that airlines are not refunding money on flight cancellations or subsequent delays due to coronavirus. Instead, the airlines are issuing vouchers to use for travel at a later date.

IATA had said that passenger revenues are projected to fall more than $250 billion if travel restrictions continue for three months because of the coronavirus outbreak. The association also warned that many airlines may not be able to survive the cash squeeze in the second quarter, as both revenues and traffic plunge because of the coronavirus outbreak. Although many governments have announced coronavirus stimulus packages to bail out the airlines, the crisis seems to be far from over.

Related topics : Coronavirus