Good afternoon and thank you for joining today’s call.
Brian’s presentation has pointed out a few things which are very important.
First, the industry is struggling through the crisis. Airlines have received over $120 billion in financial assistance from governments. That is helping to avert a big number of bankruptcies. But the number of airlines going under is growing. So we continue our call on governments to provide financial support.
The second point is that the kind of financial assistance provided has consequences. Over half the government aid ($67 billion) is in a form that will increase debt—loans, loan guarantees, deferred tax payments etc. These have been life-saving measures for the airlines.
Policy makers, however, should be fully aware that the increased debt-burden will have consequences. Governments will still want airlines to improve environmental performance, to provide affordable connectivity and to manage the increased operational costs of COVID-19 containment measures. And they will need to re-pay the debt. It will make the recovery longer and more difficult.
For governments that have not provided assistance, we continue to ask them to do so. But, considering the industry’s ballooning debt, our advice is to focus on ways that will not further increase the debt burden. This could be grants, subsidies, or payroll assistance.
Before I take your questions, I would also like to highlight a growing concern on the quarantine measures that some governments are putting in place.
One development is of particular concern. That is the politicization of quarantine measures. In response to the UK government’s announced 14-day quarantine measures for all arrivals, France announced that it would do the same for arrivals from the UK. Measures must be guided by science, not politics. And tit-for-tat quarantine measures are, frankly, unacceptable.
Last week we outlined principles that our Board of Governors has committed to for the recovery. Health and safety are at the top of the list. And this is followed by support for scientifically based measures. If governments do not have the confidence to open their borders without imposing onerous quarantine measures, then we need to work with them to understand what scientifically supported measures will give them that confidence.
The good news is that the technology for COVID-19 testing at scale is advancing quickly. We still don’t have a perfect solution. But there are hopeful signs that this could eventually play an important role for travel.
With that, I am happy to take your questions.
Media Briefing Recording: Listen to the teleconference (mp3)