Industry body the International Air Transport Association (IATA) has warned that the world’s airlines may need up to $200bn in government support to see them through the coronavirus crisis.
Airlines around the world are in talks with different governments regarding the possibility of state aid as the outbreak continues to devastate the aviation industry.
Boeing, which has already seen its shares plummet a further 17 per cent today, confirmed that it was in talks with the US government, whilst Airbus has reportedly signalled to the German state that assistance might be required if the outbreak continues for several months.
In the UK carriers such as Virgin Atlantic and Easyjet have also called for financial support from the government in light of the unprecedented circumstances.
Credit agency Moody’s this morning downgraded Easyjet’s rating, and also put British Airways owner IAG on a downgrade watchlist.
With widespread travel bans and border closures now in place around the world, passenger demand is set to collapse to near zero, prompting airlines to ground the majority of their fleets and enforce mass lay offs.
Industry consultancy Tourism Economics forecast international travel will slump at least 10.5 per cent in 2020, the biggest year-on-year drop ever recorded.
Speaking to reporters, IATA chief Alexandre de Juniac said: “If we want to maintain a strong airline sector able to cope with this difficult crisis and provide the resources to ensure the recovery will happen in due time, we need governments to act strongly and quickly”.
He added that the state aid estimate, which comes after US airlines asked for $50bn for a bailout yesterday, factors in measures such as loan guarantees.
According to IATA chief economist Brian Pearce, 75 per cent of airlines had cash to cover less than three months of unavoidable fixed costs.
Passenger numbers were likely to be down significantly more than the 16 per cent decline IATA had previously estimated, Pearce said.