Airline alliances urge government, industry support to navigate Covid-19

The world’s three major airline alliances – oneworld, SkyTeam and Star Alliance – have issued a joint release calling on governments and stakeholders to take action, such as providing slot relief, as well as airport and overflight fees reduction, to mitigate the unprecedented challenges faced by the global airline industry amid the Covid-19 pandemic.

The virus has sent the global aviation industry into a tailspin, due to weakening demand for travel that is tied to growing travel restrictions worldwide. As such, some airlines have been running near-empty flights or none at all, while others have been forced to temporarily shutter.

Global airline alliances urge government support to weather the Covid-19 storm

The three global alliances, which represent almost 60 airlines around the world, with member carriers contributing to more than half of global airline capacity, said that they are “strongly supporting a request by the 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 alliances welcome the 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,” read the joint statement.

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 forecasted 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.

To alleviate the immense pressures faced by airlines in the current operating environment, and in support of IATA’s statement on March 12, the three alliances urge 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.

Rob Gurney, CEO of oneworld, 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 wide-scale economic implications that will result from those measures.”

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