IATA(International Air Transport Association)
Airlines will need to cut more jobs for them to survive the pandemic crisis or face failure in the next 12 months, according to the International Air Transport Association (IATA).
Speaking during a webinar, the director-general and CEO of IATA, Alexandre de Juniac said that while the body doesn’t advocate job cuts, it may be the only way for airlines to survive.
According to the latest reports from IATA, in 2021 the global airline revenue will decrease by 46 per cent compared to 2019’s record of $838 billion, compared with previous projections of a 29 per cent drop.
The body also warned that the airline industry will burn through $77 billion in cash during the second half of 2020 (almost $13 billion/month or $300,000 per minute), despite the restart of operations.
Therefore, maintaining labour productivity levels of 2019 in 2021 will require employers to be cut by 40 per cent, meaning further jobs losses or pay cuts will be required to bring unit labour costs down to the lowest point of recent years.
“If airlines are coming to a point at which they cut these jobs, of pilots and flight attendants because they cannot do otherwise, I would ask the pilots and the flight attendants to accept this is a very difficult rule and accept it to help the airline industry to survive.” Said De Juniac
He also added that 1.3 million jobs are at risk terming it as ‘a labour catastrophe’ which he said that government will need to provide financial relief to airlines to save that cause.
The global aviation body said that to date governments around the world have provided $160 billion in support, including direct aid, wage subsidies, corporate tax relief, and specific industry tax relief including fuel taxes.
“Air travel is particularly sensitive to the case numbers. International travel is being affected by government travel restrictions, which are being put in place because of the fear of importing COVID-19 cases. In those circumstances we think a testing regime is a way forward, to avoid quarantine restrictions which are effectively the same as a travel ban.” Said Brian Pearce, IATA chief economist.
The slow recovery in air travel will see the airline industry continuing to burn through cash at an average rate of $5 to $6 billion per month in 2021, stated IATA in its report.
Kenya’s national air carrier Kenya Airways (KQ) recently announced that it is pushing to have its pilots paid per trip as it seeks a lower wage bill in order to stay afloat.