Government decisions restricting travel due to the coronavirus pandemic may lead to adverse economic repercussions, the International Air Transport Association (IATA) warned this week after US President Donald Trump’s announcement on Wednesday, that travel from Europe was off limits starting at midnight today.
“Governments must impose the measures they consider necessary to contain the virus. And they 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 Alexandre de Juniac, IATA Director General and CEO.
IATA underlined the importance of heeding WHO (World Health Organization) recommendations for public health, but stressed that the industry is under extreme pressure and that decisions must be made with the financial frailty of airlines in mind.
Citing Flybe’s collapse earlier this month, de Juniac stressed the need for emergency measures, including extending lines of credit, reducing infrastructure costs, lightening the tax burden.
Indicatively, according to IATA estimates, Covid-19 is expected to cost airlines some 113 billion dollars in revenue. The total value of the US-Schengen market in 2019 came to 20.6 billion dollars. IATA notes that markets facing the greatest impact are US-Germany (4 billion dollars), US-France (3.5 billion dollars) and US-Italy (2.9 billion dollars).
“We urge the US and other governments that have placed travel restrictions to follow the WHO guidance… Air transport is vital, but without a lifeline from governments we will have a sectoral financial crisis piled on top of the public health emergency,” he said.
Meanwhile, Lufthansa and Air France announced today that they will continue their flights to the US despite Trump’s travel restrictions, but Norwegian Airlines – the largest carrier serving New York and other major US cities – will cancel 4,000 flights and temporarily lay off half its staff.