The tourism industry has been hit the worst amid the Coronavirus or COVID-19 pandemic with airlines slashing operations and grounding large amounts of their fleet. Demand for travel has reduced drastically as countries shut their borders to control the virus. Needless to say, airlines and their staff are suffering financially.
Many loss-making airlines are finding it hard to see the light at the end of the tunnel and are expecting to go bankrupt and completely cease operations this year unless they receive bailouts from their respective governments. Airlines all over the world are seeking bailouts, some of which are in ten-figure numbers.
In the United States, all major airlines like United, Delta, American, Atlas Air, Southwest, Hawaiian and JetBlue have come forward and asked for assistance packages. These assistance packages for airlines will compensate them for the reduced liquidity in seat bookings and overall earnings, which should allow them to survive the rest of the year. The airlines said that they would need $25 bllion in loans and another $25 billion in grants as well as major tax cuts, to survive. The National Economic Council and U.S. Treasury are drafting a proposed assistance package and officials have been in early talks with lawmakers. Apart from airlines even US aircraft manufacturing giant Boeing has sought short term assistance for itself, the amount of which has not been declared yet.
Joe DePete, Air Line Pilots Association President said on Monday that “any economic relief package must contain strong labor protections for the airline employees who have—or will—suffer financial harm.”
Senator Ed Markey said any airline bailout “must have some major strings attached – including new rules to prohibit consumer abuses like unfair change and cancellation fees; protections for front-line workers like flight attendants, pilots, and airport workers.” He also called for requiring the “development of long-term strategies and targets to reduce the carbon footprint of the airline industry.”
In Europe, to safeguard the interests of airlines, the European Commission (EC) suspended Airport Slot Requirements on the “Use it or lose it rule” until June 30th, 2020 after being criticised by the IATA. Low-cost carrier, Norwegian, has sought a bailout for an unspecified amount which it needs urgently as the already debt-ridden airline has had to ground 40% of its long-haul fleet and 25% of its short-haul fleet.
One can only hope that the travel and tourism industry will be back on its feet soon, but until then the governments will have to play a major part to save the industry and its players.
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