IATA has called on the Canadian government to provide urgent financial relief to airlines as they struggle to survive the devastating impact of the COVID-19 crisis.
In a statement issued on May 1, it estimated that revenues generated by airlines in the Canadian market will fall by C$14.6 billion (43.2%). That, it said, puts at risk nearly 250,000 Canadian jobs and C$25.4 billion of Canada’s GDP, which is generated by aviation directly as well as by aviation-related tourism.
Peter Cerdá, IATA’s regional vice president for the Americas said: “Airlines are facing their darkest hour. Passenger traffic has virtually stopped, and cash flows are almost non-existent. The consequences for the Canadian economy are severe. Government support is needed now to ensure that Canada has a viable airline industry to lead the economic recovery.
‘’Airlines have taken emergency measures to preserve cash. But airlines are among the first and hardest hit. Globally, the industry could suffer a liquidity crisis of up to C$84.7 billion in the second quarter as demand plummets by 80% or more.”
Among governments that already have stepped up to help their country’s airlines, IATA highlighted:
- The United States provided US$61 billion in relief to the aviation sector
- France announced a financial aid package valued at EUR7 billion
- The Republic of Korea has promised financial support for local full service carriers worth a total of KRW2.29 trillion (US$1.86 billion)
IATA’s statement continued:
Air transport in Canada contributes C$51.4 billion to the country’s GDP and supports some 633,000 jobs (direct and indirect). Spending by foreign tourists supports another C$16.7 billion of GDP, making a total a contribution of C$68.1 billion. In total, 3.2% of the country’s GDP is sustained by the inputs of the air transport sector and foreign tourists arriving by air.
Mr Cerdá concluded: “When the COVID-19 virus is brought under control, global economic activity will once again re-start and a viable aviation sector will be critical for the recovery. In a country as vast as Canada it is a lifeline upon which people and businesses depend.”