IATA: Closed border costs Israel 5% of GDP

Plane taking off Photo: Shutterstock ASAP Creative

The International Air Transport Association has warned the Israeli government that delaying the restart of air travel could affect over 95,000 jobs.

The International Air Transport Association (IATA) has warned the Israeli government that delaying the restart of air travel because of the Covid-19 pandemic could affect 95,000 jobs and cost the country 5% of its GDP.

Despite the rise in new Covid-19 infections in Israel and worldwide, IATA is attempting to press the Israeli government into opening its borders. Until July 1 and probably many months to come, foreigners are barred from entering Israel while Israelis returning from abroad must undergo 14-days mandatory self-isolation.

IATA writes, "The shutdown of air travel caused by the Covid-19 crisis means that passenger numbers to/from Israel will decline by 13 million (55%) this year and airline revenues will fall by $3.2 billion. The wider impact on Israel’s economy is estimated to be around $8.3 billion."

Firstly, IATA urges the Israeli government to provide direct financial assistance to the aviation industry. "Examples include substantial aid given by governments in France, Germany, the US and Singapore. While all assistance is helpful, governments should avoid loans which ultimately increase industry debt levels. Other options including subsidizing domestic operations and waiving airport and air traffic control charges."

IATA also presses for extensions to wage subsidies and corporate taxation relief measures. "The wage subsidy schemes have provided some $35 billion in relief to airlines. Relief for corporate and indirect taxes such as VAT, passenger taxes or fuel taxes would support market stimulus.

IATA also warns the Israeli government to avoid increases in charges and fees. "Steep increases in airport and air navigation charges must be avoided during the restart period as this will severely impact airline financials and market recovery. Similarly, governments should cover the costs of new health measures imposed as a result of Covid-19."

IATA adds, "While financial aid is important to the aviation industry, for the wider economy it is vital that air connectivity can restart. In total, aviation supports 185,000 jobs and 5% of Israel’s GDP. The continued shutdown of the industry puts about half this total contribution at risk. Therefore, it is essential the Israeli government sets out a plan for eliminating the quarantine measures and re-integrating the nation into global travel and trade."

"There are established best practices laid out by the International Civil Aviation Organization (ICAO) for restarting aviation which strike the right balance between safeguarding public health while permitting viable air services. The measures, including more thorough and frequent cleaning, and the wearing of face masks, further reduce the already low risk of transmission on board airplanes."

IATA also said, "Our latest passenger survey shows that 83% will not travel if a quarantine is in place. Therefore, if the Israeli government is looking to restart the economy, it needs an alternative risk-based solution."

Published by Globes, Israel business news - en.globes.co.il - on June 21, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Plane taking off Photo: Shutterstock ASAP Creative
Plane taking off Photo: Shutterstock ASAP Creative
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