IATA: If the coronavirus continues for 2-3 months, many airlines will go bankrupt

If the coronavirus crisis continues for another two or three months, it could force some carriers to close their businesses and cause more consolidation in the aviation industry, the chairman of the International Air Transport Association (IATA) told on Friday.

Alexandre de Juniac explained that revenue losses would be “probably over” 113 billion USD, as they were estimated a week or so before the Trump administration’s announcement to restrict travel to the US from Europe.

“We ask all governments that have put restrictions – and the US government in particular – to review their decision to see if they can ease it or give it up – the sooner the better”, said Alexandre de Juniac.

IATA urged governments on Thursday to consider extending credit lines, reducing infrastructure costs and taxes on airlines. Carriers serving Germany, France, and Italy are most at risk of coronavirus control measures.

Asked if he was worried that other carriers might follow the British company Flybe, which went bankrupt last week, Alexandre de Juniac replied that “it will depend on the intensity and duration of the crisis”.

“If the decline is as deep as we see it now, and if it continues for more than two or three months, we will witness some difficulties among airlines”, said he. “Some of them are likely to have financial difficulties that will likely lead to further consolidation”, added Alexandre de Juniac.

Coronavirus recession spread in the Pacific region on Friday as Australian travel companies begin issuing profit warnings, Japanese carriers reduce capacity as US airlines cut flights to Europe as new travel restrictions bind.

IATA, whose members are 290 airlines from 120 countries, representing 82% of global air traffic, has asked governments to ease the rule that flights cannot be canceled less than two weeks before the scheduled trip and reduce airfare.

“We ask governments to reduce our costs, for example by reducing airport charges such as parking fees”, added he.