KUALA LUMPUR: Malaysia Airlines needs government financial support to ensure its readiness for the post Covid-19 period.
The Malaysian Association of Tour and Travel Agents (Matta) said the aviation industry sits at the core of the whole tourism ecosystem.
Matta president Datuk Tan Kok Liang said air connectivity was crucial to the nation’s tourism and economy recovery.
He said this in response to a proposal by International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali, on the possible merger between Malaysia Airlines and Air Asia Group.
He said countries worldwide were expected to bailout their respective national carriers.
For instance, the Singapore government had arranged up to S$19 billion (US$13 billion) of funding to support Singapore Airlines (SIA) through the coronavirus crisis. Hong Kong had provided a relief package of HK$2 billion (US$258 million) to ease the liquidity pressure of airlines and aviation support services operators, he said.
Tan said in addition, the United States (US) government had reached an agreement in principle with US major airlines over the terms of a $25 billion bailout, while the European Commission has approved approximately €455 million loan guarantee scheme to Sweden.
The financial aid was to help the airline industry as it struggles to weather the economic fallout from the Covid-19 pandemic.
Tan said the International Air Transport Association (IATA) had also strengthened its call for urgent action from governments worldwide to provide financial relief to airlines.
It is estimated that the Covid-19 will lead to losses for global airlines amounting up to US$314 billion (RM 1.36 trillion), 25 per cent more than previously forecast.”
“Without airlines to bring in millions of tourists in and out of Malaysia, there will be no viable tourism industry.
“They are the first in the long line of supply chain in the tourism industry that includes airports, road and rail transport, accommodation, food and beverage, entertainment and shopping plus business, education and health services,” Tan said in a statement here today.
He said that airports in Malaysia registered a decline of 27.6 per cent with 18.4 million passenger movements. International and domestic passenger movements decreased by 32.4 per cent and 22.4 per cent respectively.
He said aircraft movements had also declined by 11.9 per cent in the first quarter of this year compared Q1 in 2019, with international and domestic movements declined by 17.5 per cent and 8.2 per cent respectively over Q1 in 2019.
“But in Q2 2020 it will be worst off as more countries closed their borders and most airlines had come to a standstill. The decline percentage will hit the high 90s. Q3 2020 will be no better. If there is any hope of recovery, perhaps we can start to looking at the final quarter (Q4 2020)”, he said.
Tan said the downfall of movement traffic was severely impacted by the travel restriction imposed due to Covid-19 and many airlines were now vulnerable of having a material impact on their financial performance.
“Massive bailout fund is needed to help Malaysia Airlines, being the national carrier, to go through the current crisis and expand afterward, and travel demand will eventually return.
“The bailout will not only tide it over a short-term financial liquidity challenge but will also assist in putting forth growth far off the pandemic,” he said.
However, he said steps needed to be taken in making air travel palatable to the public again.
“This may involve a new way of travel with changes for in-flight amenities, health kiosks and conducting rapid on site Covid-19 test certificates for passengers,” he said.