By Stephanie Nebehay
GENEVA (Reuters) – If the coronavirus crisis continues for two or three months, it could force airlines to collapse and trigger greater consolidation in the distressed aviation industry, the head of the International Air Transport Association (IATA) told Reuters on Friday.
Alexandre de Juniac said in an interview at IATA headquarters that revenue losses would "likely" exceed $ 113 billion, which was estimated a week ago before the Trump administration announced U.S. travel restrictions across much of continental Europe.
"We urge all governments that have imposed restrictions – especially the US government – to review the decision permanently to see if they can mitigate or override it – the sooner the better," said de Juniac.
IATA urged governments on Thursday to consider extending credit lines, lowering infrastructure costs, and lowering taxes on cash-strapped airlines. Carriers serving Germany, France and Italy are most at risk.
De Juniac asked if he was afraid that other airlines would follow the British Flybe, which went under last week, and said that "it would depend on the intensity and duration of the crisis".
"If the decline is as significant and deep as we see it now and if it goes on for more than two or three months, we will find some difficulties with the airlines," he said.
"Some of them are likely to face financial difficulties and will likely lead to further consolidation," added de Juniac, a former managing director of the Air France-KLM group.
The effects of the coronavirus spread across the Pacific on Friday. Australian travel agencies issued profit warnings and Japanese airlines cut capacity, while US airlines quickly cut flights to Europe due to new travel restrictions.
"Apparently, the financial shock in the various markets was generally across industries, especially airlines," said de Juniac.
"So it is only a signal that everyone is aware of the importance and the enormous magnitude of this crisis for our industry. But unfortunately not only for us."
IATA, whose 290 member airlines in 82 countries make up 82% of global air travel, has urged governments to waive the “slot rule” that requires airlines to use or use a slot for 80% of a season lose, he said.
"We are calling for this rule to be lifted worldwide by the end of the summer season," said de Juniac.
It has asked regulators to relax the rule that flights should not be canceled less than two weeks before the scheduled departure, and has sought to reduce overflight fees, he added.
"We are asking governments to cut our fees by either lowering airport fees, for example parking fees."
"Because all of our planes are parked empty on the tarmac, so we are demanding a reduction in parking fees," said de Juniac.