Travel and tourism face 'existential threat' and 'incalculable damage'
Gary Parkinson
With planes grounded, the whole travel industry faces 'an existential threat.' /AP Photo/Elaine Thompson

With planes grounded, the whole travel industry faces 'an existential threat.' /AP Photo/Elaine Thompson

With travel and tourism facing commercial annihilation during the COVID-19 crisis, industry chiefs have implored global governments to take "drastic and immediate action." 

In an open letter, the World Travel & Tourism Council (WTTC) urges governments to extend financial help to a sector that contributes 320 million jobs and 10.4 percent of global GDP. "It is responsible for creating one in five new jobs," says the letter, "and for eight successive years has outpaced the growth of the global economy. 

"Without travel and tourism," continues the WTTC, "economies around the world face an existential threat… Any delay will be costed in millions of lost jobs and almost incalculable damage worldwide."


Grounded airlines 

The coronavirus has caused tourism levels to plummet, firstly through fear and then through dozens of countries closing their borders. As an example of an affected industry, airlines have been devastated: it sometimes seems profit warnings have been flying more frequently than planes. 

On Tuesday, the Airports Council International (ACI) also wrote to ministers demanding a continent-wide response, noting that EU, UK and EEA airports had 54 percent fewer passengers last week (9 to 15 March), after a 24 percent fall the previous week.

With the outbreak "now covering markets that represent 94 percent of global passenger revenue,"  the aviation industry's main global body, the IATA, estimated it could require "something like $150 billion to $200 billion" of governmental help. 

The IATA’s chief economist Brian Pearce revealed that three-quarters of airlines now have liquidity covering less than three months of unavoidable fixed costs: "The majority are in a very fragile place."

Airlines are now openly discussing minimizing their exposure through cost-cutting measures including job losses. British Airways informed unions on Tuesday that it planned to make some pilots redundant. Air New Zealand, Norwegian, Qantas, Scandinavian and Southwest have also raised the possibility of job cuts.  

With the airline industry being only one of the affected areas, the WTTC is asking governments for threefold financial help: to protect worker incomes; to secure "unlimited interest-free loans" to companies; and to waive "all government taxes, dues and financial demands" for 12 months with immediate effect.

With health services expected to be pushed to (or beyond) their limits, governments may not be willing or even able to help the tourism and travel industry. If not, the economic effects predicted by the WTTC could add yet more problems to a world traumatized by the coronavirus.


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Source(s): Reuters