More than 378,000 employees in the UAE’s aviation industry are now at risk of unemployment or loss of income due to the disruptions caused by the coronavirus pandemic, the International Air Transport Association (IATA) said on Thursday.
The workers are employed with airline companies, airports, suppliers, service providers and other businesses related to passenger air travel, said Muhammad Ali Albakri, IATA’s regional vice president for Africa and the Middle East (AME).
Across the region, the number of jobs at risk now stands at 1.2 million, up from approximately 900,000 from the previous estimates, while the revenue loss is estimated to be $24 billion and the loss in GDP contribution forecast to be around $66 billion.
Albakri once again called for governments to step in and provide financial relief to affected businesses, citing that the longer the travel restrictions stay in place, the more companies will suffer.
He said the plight of organisations in the air transport sector should be given immediate attention before stakeholders even start talking about resuming passenger flights.
“Airlines are burning through their cash reserves, which can only last up to two to three months. These airlines are really facing a crisis and they are struggling to survive. We are concerned that if these companies start falling, if they run into a brick wall, countries will have difficulties rebuilding their economies,” Albakri told reporters during a media briefing.
Airlines in the UAE have halted services in and out of the country’s airports as part of efforts to curb the spread of the virus. A few flights have recently been operated by carriers like Emirates and flydubai, but they’re intended only for the repatriation of stranded tourists and expatriates who want to return home during the pandemic.
Dubai Airports, which owns and manages Dubai International and Al Maktoum International, said on Wednesday that they are now preparing for the “gradual” restart of airport operations once the travel restrictions are lifted.
It’s not immediately clear when the flight suspensions will be lifted, but the longer commercial planes are grounded, the more losses airlines are expected to incur. According to IATA’s latest estimates, the health crisis will see airline passenger revenues drop by $314 billion in 2020, a 55 percent decline compared to 2019.
Hardest hit airlines
In the Middle East region, the hardest hit will be Saudi Arabia’s airlines, with an estimated $7.1 billion revenue loss, followed by the UAE ($6.8 billion), Egypt ($2.1 billion), Iran ($1.8 billion) and Morocco ($1.6 billion).
The pandemic also puts at risk about $23 billion in gross domestic product (GDP) contribution supported by air transport in the UAE alone. In Saudi Arabia, the loss of GDP contribution is estimated to be $17.9 billion.
“We need to bring the message louder to the public and decision-makers (regarding the magnitude of the financial impact of the pandemic). The numbers are very clear. The stats are very clear. The impacts are very clear. Studies have been done by economists around the world. We need you to amplify the message for governments to help airlines stay alive and not go under,” Albakri pointed out.
Dubai Airports had earlier said they are extending assistance to companies affected by the coronavirus through their “business stabilization framework.” The company said it is waiving 100 percent of minimum guarantees or equivalent fees for businesses that have been forced to stop trading due to the suspension of airport operations.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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