IATA "Global Airlines Revenue to Drop 300 Trillion Won Due to COVID-19"

IATA "Aviation Industry Faces Severe Crisis... Each Country Must Provide $200 Billion in Liquidity"

On the 24th, Eastar Jet decided to suspend all domestic flights following the suspension of international flights due to the spread of COVID-19. It is the first shutdown among South Korean airlines. On the same day, the Eastar Jet ticket counter at the domestic terminal of Gimpo Airport in Gangseo-gu, Seoul, was quiet. Photo by Moon Honam munonam@

[Asia Economy Reporter Yu Je-hoon] As the novel coronavirus infection (COVID-19) sweeps across the United States, Europe, and the world, the performance outlook of global airlines is rapidly deteriorating. Accordingly, the International Civil Aviation Organization has appealed for liquidity support of about $200 billion (approximately 248 trillion KRW) for the aviation industry.

The International Air Transport Association (IATA) announced on the 24th (local time) that due to COVID-19, global airline passenger demand measured by Revenue Passenger Kilometers (RPK) is expected to decrease by 38% compared to the previous year, resulting in a revenue loss of $252 billion (approximately 312 trillion KRW) this year. IATA is the largest international civil aviation organization with over 290 member airlines worldwide.

Earlier, at the end of last month, IATA projected a revenue decline of $29.3 billion (approximately 35 trillion KRW) due to COVID-19, but in early this month, it raised the estimate to $113 billion (approximately 133 trillion KRW). However, as the spread of COVID-19, which had been centered in Korea and China, expanded to the United States and Europe, IATA revised this estimate again within three weeks.

According to IATA, the regional demand decline rates are expected to be ▲Europe (46%) ▲Latin America (41%) ▲Middle East (39%) ▲Asia-Pacific (37%) ▲Africa (32%) ▲North America (27%). The revenue losses are projected as ▲Asia-Pacific $88 billion (approximately 109 trillion KRW) ▲Europe $76 billion (approximately 94 trillion KRW) ▲North America $50 billion (approximately 62 trillion KRW) ▲Middle East $19 billion (approximately 23 trillion KRW) ▲Latin America $15 billion (approximately 18 trillion KRW) ▲Africa $4 billion (approximately 5 trillion KRW).

With demand and revenue declines progressing sharply, IATA expects that the economic recession caused by COVID-19 will likely delay demand recovery. IATA forecasts that seat supply measured by Available Seat Kilometers (ASK) will decrease by 65% year-on-year in the second quarter and recover to about a 10% decrease by the fourth quarter.

IATA appealed for active support from governments worldwide as airline losses are rapidly expanding. Specifically, it mentioned ▲direct liquidity support ▲loan guarantees and support, corporate bond support ▲tax relief.

Alexandre de Juniac, IATA Director General, emphasized, "The aviation industry is facing its most critical crisis, and without immediate government support, the industry cannot survive," adding, "Airlines need $200 billion in liquidity support to get through this situation."