World’s ailing airlines appeal for aid as U.S. offers $58 billion
27 March, 2020, 12:20 pm
DUBAI/SINGAPORE (Reuters) – Global airlines urged the world’s major economies to act quickly to prevent irreversible damage to an industry that has seen demand decimated almost overnight by the coronavirus crisis.
Several states have already stepped in to help airlines hammered by the travel slump, with the United States offering $58 billion in aid, Singapore announcing support for aviation and Australia easing competition rules.
As leaders from the Group of 20 nations met for a video summit, the International Air Transport Association (IATA) asked governments to provide or facilitate financial support for the major carriers it represents.
“The spread of the COVID-19 pandemic around the globe and the resulting government-mandated border closings and travel restrictions have led to the destruction of air travel demand,” IATA Chief Executive Alexandre de Juniac said in an open letter.
Underlining the industry’s plight, AirAsia, the region’s biggest budget carrier, became the latest to announce sweeping schedule cuts and said some of its businesses would halt flights altogether for a period.
Singapore Airlines said it would tap existing investors for up to S$15 billion ($10.5 billion) through the sale of shares and convertible bonds to offset the shock to its business from the coronavirus outbreak.
It also arranged a S$4 billion bridge loan.
“Many airlines have been paying out more in refunds than they have received in new booking revenues,” de Juniac, a former head of Air France-KLM, said.
“The average two-month cash reserves held by airlines are rapidly being exhausted,” de Juniac added, calling for direct financial support, loans or tax relief.