Airports react after US government commits to $10 billion relief package

By Luke Barras-hill |

Capitol-US-airportrelief

The US government is providing $10bn in direct assistance to airports.

Airports Council International North America (ACI-NA) has applauded a US Senate decision to pledge $10 billion to support airports in the country.

Bi-partisan support for a roughly $2tn coronavirus (Covid-19) economic aid package to assist embattled industries was approved yesterday (25 March).

ACI North America (ACI-NA) President CEO Kevin M. Burke said: “The entire airport industry is extremely grateful that Congress and the Trump administration have stepped up to help offset a portion of the $14bn and counting that airports will lose this year as a result of the steep, unexpected drop in travel brought by the coronavirus health pandemic.”

As reported, the IAADFS has urged airports to suspend concessionaires’ minimum guarantee payments.

AIRLINES: APOCALYPSE NOW

ACI-NA has forecast a 73% fall in passenger traffic between March to June, equating to a 53% drop in the first half of the year.

As things stand, it is predicting a 37% decline in passengers in full year compared with previous forecast 2020 levels.

Airports are expected to shed around $12.3bn in operating revenue for the calendar year – a 49% decline as a result of travel cancellations and substantially lower non-aeronautical income, among other factors.

The association adds that the situation has been compounded by the need to service existing debt obligations totalling roughly US$100bn and the incidence of higher operating costs around cleaning and sanitisation procedures, extra staff and training.

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Source: ACI-NA.

On a separate but related note, the International Air Transport Association (IATA) has announced today it has written to heads of government in 18 Asia Pacific states to appeal for emergency support for airlines.

IATA is proposing a combination of direct financial support measures: loans, loan guarantees and support for the corporate bond market; and tax relief from states including Bangladesh, India, Japan, Malaysia, Pakistan, Philippines, Republic of Korea, Thailand and Vietnam.

Alexandre de Juniac, IATA’s Director General and CEO said: “Airlines are fighting for survival in every corner of the world. Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business.

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Alexandre de Juniac, IATA’s Director General and CEO.

“For airlines, it’s apocalypse now. And there is a small and shrinking window for governments to provide a lifeline of financial support to prevent a liquidity crisis from shuttering the industry.

“In a matter of days, the crisis facing airlines worsened dramatically. We are 100% behind governments in supporting measures to slow the spread of Covid-19. But we need them to understand that without urgent relief, many airlines will not be around to lead the recovery stage.”

Countries in Asia Pacific and Oceania have pledged financial aid packages to support the aviation sector.

Australia has offered a A$715m financial injection covering refunds and waivers on fuel taxes, domestic air navigation and regional aviation security charges.

New Zealand will open a NZ$900m loan facility to the national carrier and an extra NZ$600m relief package for aviation.

Singapore is offering rebates on airport charges, rent rebates and support to ground handlers as part of a S$112m package.

“A growing number of governments in Asia Pacific, including Australia, New Zealand, Singapore, have announced financial relief packages for the airline industry and we are grateful to them for the assistance rendered during this dark period for the airline industry,” added Conrad Clifford, IATA’s Regional Vice President for Asia Pacific.

“But we need more governments to come on board to support the airline industry serving their markets.”

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