March 13, 2020 / 12:20 PM / in 23 days

More airlines could collapse if coronavirus crisis lasts 2-3 months - IATA chief

GENEVA, March 13 (Reuters) - If the coronavirus crisis lasts another two or three months, it could force carriers to collapse and spark more consolidation in the beleaguered airline industry, the International Air Transport Association (IATA) chief told Reuters on Friday.

Alexandre de Juniac, in an interview at IATA headquarters, said revenue losses would be “probably above” $113 billion that it estimated a week ago, before the Trump administration’s announcement of U.S. travel curbs on much of continental Europe.

“We are asking all the governments who have put restrictions - and the U.S. government particularly - to review the decision permanently to see whether they can alleviate or waive that decision - the sooner the better,” de Juniac said.

IATA called on Thursday for governments to consider extending credit lines, reducing infrastructure costs and cutting taxes for cash-strapped airlines. Carriers serving Germany, France and Italy are most at risk.

De Juniac, asked whether he feared that other carriers would follow Britain’s Flybe, which went under last week, said that it would “depend on the intensity and the duration of the crisis”.

“If the drop is as significant, as deep, as we are seeing now, and if it lasts for more than two or three months, we will see some difficulties among airlines,” he said.

“Some of them will probably have financial difficulty, it will probably lead to a further consolidation,” added de Juniac, a former Air France-KLM group chief executive.

FINANCIAL SHOCK

The fallout from the coronavirus spread across the Pacific on Friday, with Australian travel firms issuing profit warnings and Japanese carriers cutting capacity, while U.S. airlines rushed to cut flights to Europe in the wake of new travel restrictions.

“Apparently the financial shock on the different markets has been in general for all industries, the airlines particularly,” de Juniac said.

“So it is just a signal that everybody is aware of the importance and the enormous order of magnitude of this crisis on our industry. But not only on us, unfortunately.”

IATA, whose 290 member airlines in 120 countries account for 82% of the world’s air traffic, has asked governments to waive the ‘slot rule’ which obliges carriers to use a slot for 80% of a season, or lose it, he said.

“We are asking to waive that rule until the end of the summer season worldwide,” de Juniac said.

It has urged regulators to relax a rule that flights can’t be cancelled less than two weeks ahead of scheduled departure, and sought a reduction for overflight fees, he added.

“We are asking governments to reduce our charges either by reducing the airport charges, for instance the parking fees.” “Because all our aircrafts are parked, empty on the tarmac. So we ask for a reduction in parking fees,” de Juniac said. (Reporting by Stephanie Nebehay; editing by David Evans)

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