|21 May, 2020

Governments 'taking too long' to help ailing MENA airlines: IATA

Coronavirus pandemic to cause carriers to bleed further, warns top official

Rekik Tsegaye, 35, an Ethiopian Airlines cabin maintenance technician stands inside a passenger carrier to be converted into a cargo plane at the Ethiopian Airlines hangar within Bole international airport in the Addis Ababa, Ethiopia May 15, 2020.

Rekik Tsegaye, 35, an Ethiopian Airlines cabin maintenance technician stands inside a passenger carrier to be converted into a cargo plane at the Ethiopian Airlines hangar within Bole international airport in the Addis Ababa, Ethiopia May 15, 2020.

REUTERS/Giulia Paravicini

Airlines in the Middle East and Africa region could “bleed” further without any urgent aid, the global body representing airlines warned Thursday, citing that “it’s taking too long” for governments to offer an emergency lifeline to an industry that has been decimated by the coronavirus pandemic.

The International Air Transport Association (IATA) told reporters that until now they haven’t heard any feedback in the region regarding their calls for help, while governments in other markets have already lined up billions of US dollars in aid.

“We are waiting to hear anything from Middle East and African governments. We know that the governments are busy fighting COVID-19… We know that governments are in direct contact with the airlines and they’re discussing what’s the best way really to provide help, but what we worry most about is that it’s taking too long,” Muhammad Al Bakri, IATA’s regional vice president for Africa and the Middle East said.

The global body warned in late April that the region’s airlines could lose $24 billion in passenger revenues this year, as passenger demand has plummeted since the start of the outbreak. The total workforce in aviation and related industries in the region could also be halved, with around 1.2 million people likely to lose their jobs.

There have been unconfirmed reports, which were later denied, that Emirates is planning to cut 30,000 jobs, while Abu Dhabi-based Etihad made hundreds of jobs redundant this month.

“I think that the longer we wait, the more bleeding these airlines go through. Unfortunately, we’ve started to see the negative impact become public for major carriers in the Middle East and now it seems that they will need to cut jobs, which is something that we’ve been trying to avoid all along,” Al Bakri said.

Some countries outside the Middle East region have already intervened and extended emergency cash assistance to struggling airlines.

The United States had earlier pledged $58 billion in aid for ailing carriers. Australia also assured in March that it is willing to write off and refund 715 million Australian dollars to airlines, while Taiwan offered to extend subsidies and loans to struggling airlines.

When asked whether it’s a good idea for ailing carriers to consolidate, to mitigate the damage caused by the crisis, Al Bakri said doing so during the pandemic would not benefit the industry.

“I don’t think the time is right to do a restructuring of this industry or these airlines. What we need to do now is to make sure that many of these airline companies, service providers and operators remain alive and continue to operate,” Al Bakri said.

“There will be a time later on, once we’re over this crisis, when mergers, consolidations and restructurings will come to play. To do it now is not advisable. This is not the time for it. I would not vote for it.  Let’s keep this industry intact. Keep these players intact. Let’s restart the industry. There will be a proper time for any restructuring,” he added.

(Writing by Cleofe Maceda; editing by Seban Scaria)

Cleofe.Maceda@refnitiv.com

#MENA #Airlines #Aviation #IATA

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© ZAWYA 2020

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