Survival post apocalypse now trainer12/29/2022 ![]() Pearce explains that in previous pandemics, “we’ve seen the worst point three months after the crisis and then three to four months after that a return to pre-crisis levels”. 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.” WHY A GLOBAL RECESSION MIGHT BECOME THE NEXT CHALLENGEīeyond this initial period of need, however, IATA also highlights a vital detail regarding this pandemic: unlike other outbreaks seen in recent history, it is likely to cause a global recession.įor many airlines, the passing of the coronavirus – and there is clearly no guarantee of when this will happen – might herald the beginning of a new crisis as economic conditions worsen.įor IATA’s chief economist Brian Pearce, this means the industry could experience something more akin to a “U-shaped” recovery, rather than the “V-shaped” one seen after the SARS outbreak in 2002-03, for example. “Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business. “Airlines are fighting for survival in every corner of the world,” states IATA director general Alexandre de Juniac. It points out that markets with severe restrictions on air travel currently cover 98% of global passenger revenues. Therefore, in a situation where “the typical airline had two months of cash at the start of this year”, this is an “apocalypse now” scenario. In the industry association’s view, this is not the time for quibbling over minor details and nuance – either governments step in to help airlines through this crisis, or the whole sector risks being “shuttered”. When IATA outlined its latest estimates for the impact of coronavirus on the airline industry on 24 March, the urgency of the situation was front and centre of its messaging.
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