Global airlines warned that up to 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 percent 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 canceled ticket for us is almost unbearable financially speaking,” De Juniac said 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.
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IATA said about $35 billion of tickets were due for refund at the end of the second quarter.
Airlines are burning through their cash reserves as they try to stay afloat, IATA said, and providing refunds for canceled flights, as rules in many parts of the world require them to do, is impossible.
Consumer groups are angry at airlines for ignoring those rules and say hard-up passengers need the cash just as much as the airlines.
IATA said about $35 billion of tickets were due for refund at the end of the second quarter, and vouchers or a delayed refund was all airlines could offer. IATA has approached governments to ask them not to force airlines to provide cash refunds.
But the US Transportation Department has told airlines they must refund tickets for flights that they cancel, or make a significant schedule change that passengers do not accept, following a rising number of consumer complaints.
