Govt-funded giveaways needed to stimulate air travel, says Iata

Giveaways could be among a range of incentives, Iata recommended, citing the example of Hong Kong Airport Authority, which bought 500,000 seats for a Lucky Draw for locals and international passengers.

It also gave the example of Thailand, which has subsidised airfares, accommodation and other services for health care workers and Greece, which offered a two-month per ticket compensation package to airlines.

Iata said incentives to travellers could come in the form of flight vouchers or as a percentage cash-back on overall travel costs.

“Financially viable airlines will be needed to lead the economic recovery from the depths of the Covid-19 crisis,” said Alexandre de Juniac, Iata’s director general and chief executive.

“Government support of $173 billion has helped many survive. With potential to safely re-open borders and revive travel with testing, governments will need to add measures that stimulate demand.

"Such targeted initiatives will help generate revenues, avoid adding debt to airlines and immediately generate economic activity across the value chain.”

Iata also called for the temporary waiver of taxes and fees to airlines and for specific route subsidies. However, it warned that any support must not inflate the industry’s collective debt, which has risen by 51% during the pandemic to $651 billion.

It added: “To put this into perspective, total industry revenue in 2021 is expected to be $459 billion.”