Yeow Pooi Ling and her husband were looking forward to visiting family in Finland in May – a cooler respite from the year-round heat of Malaysia, and a trip that they had booked months ago. But the coronavirus pandemic has left them stuck with return tickets they will not be using.
“We usually buy our air tickets early to secure the cheapest fares, which don’t allow any refund or cancellation. My husband is now checking with the airline on our options,” Yeow told Al Jazeera.
Yeow is far from alone. Her predicament reflects the troubles that millions of other travellers around the world are also facing, just as redundancies and pay cuts place enormous financial burdens on household budgets everywhere.
And government-mandated border shutdowns aimed at stopping the spread of the virus have dealt a hammer blow to airlines forced to ground their fleets. The global industry is bleeding billions of dollars in cash, with some carriers already facing bankruptcy and others seeking government help. United States Treasury Secretary Steven Mnuchin and United Airlines CEO Oscar Munoz have both said the crisis is worse than the one the aviation industry faced in the aftermath of the September 11, 2001 attacks.
But the jury is out as to whether the assistance that governments are offering will be enough to save all the carriers facing financial hardship. And such measures are reopening the debate over whether public funds should be used to rescue companies and their shareholders.
More than half of the world’s fleet of passenger aircraft has been grounded because of travel bans, according to the International Air Transport Association (IATA), an airline industry group.
“The industry’s outlook grows darker by the day,” Alexandre de Juniac, IATA’s Director General and CEO, said in an April 14 statement.
Burning through cash
IATA estimated in late March that industry passenger revenues could plummet by $252bn, a 44 percent decline from 2019, assuming that travel restrictions will last for up to three months. In its latest assessment in mid-April, the association projected an even bigger loss in revenue of $314bn in 2020, a 55 percent year-on-year decline.
The huge drop in expected revenues this year will likely wipe out much of the profits global airlines made in the last decade, Karsten Benz, professor for aviation management at Frankfurt University, told Al Jazeera.
And the grounding of so many flights is threatening the livelihoods of tens of thousands of people in the airlines themselves and related industries.