USD 35-bn liability in June quarter over COVID-19: Airlines' body
India has imposed a 21-day lockdown to contain the spread of the COVID-19 (coronavirus disease 2019), and domestic and international commercial passenger flights have been suspended for this period. Many other virus-affected countries have taken similar measures.
"On top of unavoidable costs, airlines are faced with refunding sold but unused tickets as a result of massive cancellations resulting from government-imposed restrictions on travel. The second quarter liability for these is a colossal $35 billion. Cash burn will be severe," the International Air Transport Association (IATA) said on Tuesday.
The industry group has also estimated that the airlines are expected to burn USD 61 billion of their cash reserves in the April-June period.
Brazil, Canada, Colombia, Italy and the Netherlands have decided to allow airlines to issue vouchers in place of refunds.
"This (permitting voucher instead of refunds) will enable airlines to preserve the cash that they need to keep cargo operations running and preserve their ability to be fully operational when we can safely re-start the industry," IATA director general Alexandre de Juniac said.
"These governments have taken an extraordinary measure in extraordinary circumstances," de Juniac said. "And it will provide a vital buffer period for airlines to keep operating. I cannot stress how important that is."
The IATA is a body of around 300 airlines, which comprise of approximately 82 per cent of air traffic globally.
In India, cargo flights, offshore helicopter operations, medical evacuation flights and flights, which have got special approval from aviation regulator Director General of Civil Aviation, are permitted to operate during the flight ban.
Total 32 people died in India and more than 1300 people have been infected by the virus till now, according to Union health ministry.
Thirty-two people have died in the country due to the infection and over 1,250 confirmed cases have been reported, according to the Union Health Ministry.