IATA estimates $ 85 billion GDP fall in Middle East due to covid-19 pandemic
The International Air Transport Association (IATA) released new data showing the impact on the Middle East aviation industry and on economies caused by the shutdown of air traffic due to the COVID-19 pandemic has deepened over recent weeks.
• Job losses in aviation and related industries could grow to 1.5 million. That is more than half of the region’s 2.4 million aviation-related employment and 300,000 more than the previous estimate.
• Full-year 2020 traffic is expected to plummet by 56% compared to 2019. Previous estimate was a fall of 51%.
• GDP supported by aviation in the region could fall by up to $85 billion. Previous estimate was $66 billion.
“Middle East economies have been brought to their knees by COVID-19. And without air connectivity being re-established, the socio-economic impact is getting worse. Businesses which contribute substantially to the region’s GDP and provide thousands of jobs are at risk without these vital connections.
For the region’s economic recovery, it is imperative that the industry restart safely as soon as possible,” said Muhammad Al Bakri, IATA’s Regional Vice President for Africa and the Middle East.
Relaunching of the aviation industry requires governmental support
To minimize the impact on jobs and the broader Middle East economy, an accelerated recovery of air transport across the region is paramount. This can be achieved through government action in two priority areas:
1. Air transport coordination to restart across the Middle East region
Some countries in the Middle East are opening their borders to regional and international air travel but inconsistent application of biosafety measures along with unnecessary entry requirements are deterring passengers and suppressing the resumption of air travel. Harmonizing the restart of aviation across the region is critical for economic recovery. Governments need to implement the common global set of air transport biosecurity measures, contained in the International Civil Aviation Organization’s CART Take-off Guidelines.
2. Financial support and relief from taxed and charges
In particular, direct financial aid such as wage subsidies and loans, an extension of the waiver to the 80-20 slot rule, and relief from taxes and charges.
“We are grateful to governments which have provided relief to aviation. However, the situation is not getting better, governments need to continue applying relief measures—financial and regulatory. A regional priority is securing support in the form of wage subsidies and loans as well as an extension of the waiver for the 80-20 use-it-or-lose-it slot rule.
This is needed to provide critical relief to airlines in planning schedules amid unpredictable demand patterns. Saudi Arabia has confirmed a waiver for its slot coordinated airports and we hope the UAE, Morocco and Tunisia will do so soon. Airlines need to focus on meeting demand and not meeting slot rules that were never meant to accommodate the sharp fluctuations of such a crisis,” said Albakri.
All five largest Middle East markets decreased
The latest assessment from IATA Economics shows that the outlook at the national level has worsened for major aviation markets in the Middle East since June. For example, the passenger numbers, jobs at risk and GDP impacts for the five biggest Middle East markets all have declined