Government support to aviation industry hits new highs due to COVID-19

Commercial air traffic has taken a severe hit since the onset of COVID-19. Passenger air transport, measured as revenue passenger kilometres, was down 90% year-on-year in April 2020 and was still down 75% in August, according to International Air Transport Association. The collapse in economic activity and trade also affected freight, but to a lesser extent, which was almost 30% lower year-on-year in April and still about 12% lower in August.

Commercial air traffic continues to struggle, with the number of flights more than 40% below pre-crisis levels globally (see our chart ).

As airline companies try to weather the shock, as of August 2020, governments have provided about USD 160 billion of support to airlines, almost two-thirds of which consists of direct aid, such as subsidies, loans, equity and cash injections.

Meanwhile, governments have to strike a balance between much needed support to shore up the aviation industry and broader policy goals, such as enhancing competition and improving the sustainability and efficiency of the aviation industry right across the value chain, including aircraft and engine manufacturers and airports. And they must also make sure that aviation plays a full part in low-carbon transition strategies.