Effective midnight tonight, the United States is turning away almost all non-US citizens who have recently been to Europe (with a list of exceptions). This ‘travel ban’ will be in effect for the next 30 days due to the coronavirus outbreak. The International Air Transport Association (IATA) recently issued a statement in response, showing support for the new policy and its extreme measures – but with a warning of the damage it will cause.
“These are extraordinary times and governments are taking unprecedented measures. Safety—including public health—is always a top priority. Airlines are complying with these requirements. Governments must also recognize that airlines—employing some 2.7 million people—are under extreme financial and operational pressures. They need support,” -Alexandre de Juniac, IATA’s Director General and CEO.
Supportive… but with a warning
While IATA’s recent press release affirms the actions being taken by governments to contain the spread of COVID-19, it also came with a serious warning. Specifically, it warned of the economic impact that these travel restrictions will have.
Therefore, IATA has urged governments to:
- Prepare for the broad economic consequences of these actions,
- Respond quickly to the financial frailty of airlines, and
- Follow WHO (World Health Organization) recommendations.
By making this statement, IATA is offering equal measures of affirmation and caution. It affirms the need for these policies, while at the same time attempting to bring to light the serious impact it will have on IATA’s member airlines.
The economic impact
IATA’s statement brings to light the enormous economic importance of air travel between the United States and Europe. In fact, in 2019, there were a total of roughly 200,000 scheduled flights between the United States and countries within the Schengen Area. This equates to 550 flights and 125,000 travelers every day.
“[Governments] must be fully prepared to provide support to buffer the economic dislocation that this will cause. In normal times, air transport is a catalyst for economic growth and development. Suspending travel on such a broad scale will create negative consequences across the economy. Governments must recognize this and be ready to support,” said de Juniac.
The point IATA really wants to drive home is that its member airlines are already struggling with the effects of the coronavirus pandemic. It aims to raise awareness that further travel restrictions will exacerbate the problem, calling on governments to support their airlines during this time. As such, it has suggested a number of measures that could be taken. They include:
- Extending lines of credit
- Reducing infrastructure costs
- Lightening the tax burden
As nearly all countries in the world have a civil aviation administration that controls various aspects of tax policy around air travel, IATA knows that these requests can indeed become a reality.
IATA is absolutely right. The economic impact has been, and will continue to be, enormous. Just last week, on 5 March, the Association estimated that the pandemic could wipe out US$113 billion of revenue. “That scenario did not include such severe measures as the US and other governments (including Israel, Kuwait, and Spain) have since put in place” the statement reads.
The statement also references the collapse of Flybe and subtly alludes to the fact that we could see a similar fate for other airlines (in Europe, Alitalia, in particular, comes to mind).
IATA concludes by asking governments to follow the guidance of the WHO (World Health Organization) – subtly asking not to go beyond what is requested – doing only what is appropriate and not overreacting. In doing so, this will not inflict more economic damage than is necessary.
What are your thoughts on IATA’s statement? Are you supportive of these new measures? Let us know in the comments.