According to new data released by IATA, the impact of the lockdown imposed during the Covid-19 pandemic on the Middle East aviation sector and economies has worsened.
The data show that job losses in the aviation industry could grow up to 1.5 million: that counts for more than half of the region’s aviation-related jobs and 300,000 more than the previous forecast.
2020 air traffic has fallen down by 56% compared to 2019. The previous estimate was a drop of 51%.
The region’s GDP related to aviation could drop by up to $85 billion. Previously, the forecast was $66 billion.
According to Muhammad Al Bakri, IATA’s Regional Vice President for Africa and the Middle East, the region’s economies have been severely damaged by the pandemic. Now the socio-economic situation is getting even worse because air connectivity has not been re-established. Businesses related to the aviation sector are a substantial source of employment and contribute to the region’s GDP. But without these vital connections, those businesses are at risk. “For the region’s economic recovery, it is imperative that the industry restarts safely as soon as possible,” he said.
Restarting air traffic in the Middle East
In order to reduce the impact on the labor market and on the broader Middle East economy, a quick recovery of the aviation industry across the region is essential. This can be achieved only if governments focus on these two priority areas:
1. Harmonizing the restart of air transport across the region. The harmonization of air travel across the Middle East is crucial for the economic recovery. Some countries in the Middle East started to reopen the frontiers to both regional and international air passengers. However, inconsistent application of safety measures as well as unnecessary entry requirements are discouraging travelers and suppressing the resumption of air travel. Governments have to adopt the common global set of air transport biosecurity measures, contained in the International Civil Aviation Organization’s CART Take-off Guidelines.
2. Continued financial and regulatory support. This includes direct financial aid (e.g. wage subsidies and loans), relief from taxes, and an extension of the waiver to the 80-20 slot rule.
Albakri expressed his gratefulness to governments that have provided relief to the aviation sector. However, he points out that the situation is not getting better and that governments should continue applying financial and regulatory relief measures. One of the regional’s priorities is supporting the industry through wage subsidies and loans as well as granting an extension of the waiver for the 80-20 use-it-or-lose-it slot rule. This last priority is particularly important to provide relief to airlines in planning schedules during these unpredictable times. “Saudi Arabia has confirmed a waiver for its slot coordinated airports and we hope the UAE, Morocco and Tunisia will do so soon. Airlines need to focus on meeting demand and not meeting slot rules that were never meant to accommodate the sharp fluctuations of such a crisis,” concluded Albakri.
The latest assessment on the Middle East from IATA Economics shows that the outlook at the national level has worsened for major aviation markets since June. For instance, the number of jobs at risk, the passenger numbers, and GDP impacts all have declined: