‘Millions of jobs at risk, airlines can’t afford refunds’

Global airlines warned that 25 million jobs across the world could be at risk from the coronavirus travel downturn and the industry’s representative body said airline finances were so fragile they could not afford to refund customers.

The International Air Transport Association (IATA) has held a series of weekly news conferences, issuing increasingly desperate messages about the state of airline industry, and urging governments to help carriers.

In its latest warning, IATA whose members include the likes of Lufthansa and British Airways parent IAG said global air travel slumped by 70% at the beginning of the second quarter, and its Director General Alexandre De Juniac said airlines could not afford to issue refunds. He said customers should accept vouchers.

“The key element for us is to avoid running out of cash so refunding the cancelled ticket for us is almost unbearable financially speaking,” De Juniac told reporters on Tuesday.

IATA highlighted the loss of jobs and the impact on the world economy if governments let airlines collapse. Three months of severe travel restrictions plus lower traffic over 2020 could put 25 million jobs at risk, IATA warned, adding that about a third of 2.7 million direct jobs in the airline sector had either been lost or were furloughed.

Airlines are burning through their cash reserves as they try to stay afloat, IATA said, and providing refunds for cancelled flights, as rules in many parts of the world such as EU261 in the European Union, require them to do, was not possible.

Reuters