International Air Transport Association (IATA) published an analysis of the impact of COVID-19 on airlines, which reveals that the aviation industry’s global debt could reach as much as USD550 billion by the end of 2020, an increase of USD120 billion on debt levels at the beginning of the year.
“Government aid is helping to keep the industry afloat. The next challenge will be preventing airlines from sinking under the burden of debt that the aid is creating,” said Alexandre de Juniac, IATA’s director general and CEO. “Paying off the debt owed governments and private lenders will mean that the crisis will last a lot longer than the time it takes for passenger demand to recover.”
The aviation industry is one of the hardest hit due to the pandemic. According to the United Nations Conference on Trade and Development, a 25% decline in tourism income will knock on average 7% off GDP among "small island developing states," a contraction that could go as deep as 16% in places such as the Maldives and Seychelles.