Friday, March 27, 2020

Indian airlines could soon run out of cash, warns IATA while seeking immediate relief from government

New Delhi: The International Air Transport Association (IATA) has warned of serious job losses in the Indian aviation industry unless the government quickly comes to the aid of the battered travel sector.

With airlines paying out more as refunds than getting as new booking revenues in recent weeks, they are depleting their reserves rapidly and “risk running out of cash in the very near future,” the global trade association of 300 member airlines worldwide said in a letter to Prime Minister Modi earlier this week.
“Prior to the outbreak of covid-19, India‘s air transport industry’s economic contribution was estimated at $35 billion, supporting 6.2 million jobs and contributing 1.5% to GDP in India…. IATA estimates covid-19 could result in a 9% loss in passenger volumes and $2.1 billion loss in passenger revenues in India in 2020. The disruptions in air travel from covid-19 could reduce about 5,75,000 jobs and $3.2 billion in GDP supported by the air transport industry in India,” IATA DG and CEO Alexandre de Juniac said in a letter to the PM this Tuesday.

Coronavirus impact on airlines is far greater and more widespread than 9/11, SARS or the global financial crisis. “India’s scheduled carriers are currently in grave and immediate danger of insolvency. A cessation of operations would trigger a host of serious consequences…. Unless government action is taken now, the post-pandemic economic recovery in India would be seriously impeded,” the letter adds.
27/03/20 Saurabh Sinha/Times of India

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