Coronavirus crisis could cull 25m aviation-related jobs worldwide
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Up to 25 million jobs could be lost globally as airlines struggle to maintain their finances amid plunging demand for air travel, due to the Covid-19 pandemic.
According to The International Air Transport Association (IATA), the livelihoods of some 65.5m people are dependent on the aviation industry, including sectors such as travel and tourism. Among these are 2.7m airline jobs.
In a scenario of severe travel restrictions lasting for three months, IATA has calculated that 25m jobs in aviation and related sectors are endangered across the world.
It added that airlines are expected to see full-year passenger revenues fall by $252bn (£204bn) or 44 per cent lower this year when compared to 2019.
The second quarter is expected to be the worst, with a 70 per cent fall as lockdowns restrict people from leaving their homes, let alone board flights.
Airlines are calling on governments to provide immediate financial aid to help them remain viable businesses.
In February, the chief executive of British Airways said the coronavirus outbreak could push some failing airlines “over the edge”.
Soon after his comments Flybe, the largest provider of domestic flights in the UK, was forced into administration.
This morning, low-cost airline Germanwings, which is owned by Lufthansa, became the latest casualty as the airline crisis worsens.
Director general of IATA Alexandre De Juniac said airlines, facing $35bn of potential refund claims by the end of this quarter, hoped passengers would accept vouchers instead.
“The key element for us is to avoid running out of cash, so refunding the cancelled ticket for us is almost unbearable, financially speaking,” he said.
Airlines are burning through cash reserves as they try to stay afloat. IATA said providing refunds for cancelled flights, as rules in many parts of the world such as the EU require them to do, was not possible.
Some consumer groups are angry at airlines for ignoring those rules and say hard-up passengers need the cash just as much as the airlines.
For example, while EasyJet passengers were initially offered refunds for their cancelled flights, they are now being led to believe they won’t receive any form of compensation whatsoever.
This follows pleas from the firm’s founder, Sir Stelios Haji-Ioannou, to scrap a £4.5bn deal with Airbus to purchase more planes and instead keep the money to shore up its finances.
His comments come as the UK Government confirms EasyJet will receive a £600m bailout from its coronavirus fund, even though the firm went ahead with a £174m dividend payout to shareholders at the end of last month. £60m of this payout went to Haji-Ioannou himself.
EU Transport Commissioner Adina Valean directly addressed the issue of refunds, stating that airlines must reimburse customers for flights cancelled because of the Covid-19 pandemic, rejecting calls by carriers to immediately relax EU rules and permit an EU-wide waiver of refund obligations for airlines.
Valean did say that the parameters could be changed for compliance with a UN climate scheme, scheduled to begin in 2021, following so many flight cancellations because of restrictions on movement to contain the coronavirus.
Speaking to Reuters, Valean said that EU law could not be altered easily: "In order to change any provision of this law, you would need wide support for an agreement from the other institutions," referring to the European Council of governments and the European Parliament.
"We are not going to act on legislation at this stage."
This story was updated on April 9 to reflect further developments, adding the EU Transport Commissioner's comments regarding airlines' obligations to refund customers.
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