Aviation companies urge Govt to mitigate financial strain amid Covid-19 pandemic

Our Bureau Mumbai | Updated on March 17, 2020 Published on March 17, 2020

Global aviation alliances, Oneworld, SkyTeam and Star Alliance on Monday issued a joint statement, calling on governments and stakeholders to “alleviate the unprecedented challenges faced by the global airline industry amid the COVID-19 pandemic”.

The three global alliances are supporting a request by IATA for regulators to suspend slot usage rules for the northern summer 2020 season as the airline industry suffers from extraordinary reductions in passenger demand.

“The impact of COVID-19 on the airline industry is significant, with IATA estimating up to US$113 billion in revenue losses for global passenger airlines. The impact is expected to have a ripple effect through the value chain that supports the airline industry. The revenue loss scenario does not include travel restrictions recently imposed by the US and other governments. US restrictions on passengers from the Schengen Area will place pressure on the US-Schengen market, valued at over US$20 billion in 2019,” said the three alliances in a joint statement.

Slot regulations

The alliances also welcomed moves in recent days by some regulators who have suspended slot regulations temporarily and urge others to follow suit promptly. They also request that regulators consider extending the suspensions for the entire operating season.

The three alliances urged governments worldwide to prepare for the broad economic effects from actions taken by states to contain the spread of COVID-19, and to evaluate all possible means to assist the airline industry during this unprecedented period.

The alliances also call on other stakeholders to provide support. For example, airport operators are urged to evaluate landing charges and fees to mitigate the financial pressure faced by airlines due to a severe decline in passenger demand

oneworld is a global airline alliance founded in Feb 1999. The alliance is represented by 13 commercial airlines and approximately 30 affiliate operators, conveying more than 530 million passengers p/a and operating with a fleet of more than 3,500 aircraft.

oneworld CEO Rob Gurney said: “During such times of difficulty and uncertainty, it is important that the airline industry works even closer with stakeholders to mitigate adverse impacts from the virus and collaborate in areas within our control. Governments must implement the measures they consider necessary to contain the spread of COVID-19, and must be prepared for the widescale economic implications that will result from those measures.”

SkyTeam is the second-largest global airline alliance founded in 2000 by Aeroméxico, Air France, Delta Air Lines and Korean Air. Air France and Delta Air Lines signed an exclusive long-term strategic agreement that laid the foundations for a major global alliance.

SkyTeam CEO and Managing Director Kristin Colvile said: “The human and financial impact that the COVID-19 outbreak is having on the aviation industry is unprecedented. SkyTeam, with its alliance partners, and on behalf of member airlines, is urging all involved institutions and industry stakeholders to face these extraordinary times with exceptional measures. This includes action such as slot relief, airport and overflight fees reduction.

Star Alliance was established in 1997 as the first global airline alliance to "better meet the needs of the frequent international traveller" and is now the world's largest global alliance.

Star Alliance introduced the Connecting Partner Model in Dec-2016 as a partnership concept for regional, low-cost or hybrid airlines to link to the Star Alliance network without full membership. Juneyao Airlines is the launch carrier under the new model, which was implemented on 23-May-2017.

Star Alliance CEO Jeffrey Goh said: “The unprecedented circumstances triggered by the coronavirus outbreak pose an existential threat not only to the airline industry but more generally to global trade and commerce, and social connectivity. As airlines stretch their limits to manage the crisis, it is equally critical for governments and stakeholders to avoid further burden and step up with measures that will ensure the future of the travel industry.”

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Published on March 17, 2020
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