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Alexandre de Juniac, head of the International Air Transport Association, is silhouetted in front of an EasyJet aircraft at Cointrin airport in Geneva, Switzerland, on March 13, 2020.

DENIS BALIBOUSE/Reuters

Almost half the world’s airlines will run out of cash and fail in the coming weeks unless governments act quickly to bail out the industry, a global air carrier group says.

The COVID-19 pandemic has slashed airline revenues by US$250-billion as governments close borders and ground most international air travel, said Alexandre de Juniac, head of the International Air Transport Association (IATA), who called on governments to “act and act quickly.”

“We are in an emergency situation,” Mr. de Juniac said in a conference call from Geneva Tuesday morning. “We need a full-speed massive rescue package now.”

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The IATA, which represents 290 airlines that account for more than 82 per cent of the world’s traffic, is calling for cash injections, loan guarantees, refinancing, credit lines and other measures totalling about US$200-billion to cover costs until demand for air travel returns.

The group issued the call just hours before WestJet Airlines Ltd. announced it would be cutting 6,900 jobs from a work force of about 14,000. WestJet said most of the cuts would be early retirements, buyouts and voluntary and involuntary layoffs.

Canadian airlines are in talks with governments regarding a bailout package, but have declined to reveal exactly how much they are seeking. Airlines are making the case for bailouts by pointing to their role in linking people and economies, as well as their large work forces. They also note that it was governments that effectively shut down their businesses to slow the spread of COVID-19.

Transport Minister Marc Garneau has met with the airlines to assess their needs. Finance Minister Bill Morneau is expected to make an announcement in the coming days.

“The government recognizes that the rapidly evolving COVID-19 pandemic is having significant impacts on airlines and their industry,” said Livia Belcea, a spokeswoman for Mr. Garneau. “We have been in touch with airlines and will work with them to help resolve these challenges.”

Canadian airlines employed 46,000 people before the crisis began, according to the National Airlines Council of Canada. The aid measures sought by the IATA and airlines includes bailout money, tax and rent relief, credit back-stopping and breaks from airport fees.

“We expect there will be something,” said Brad Cicero, a spokesman for Toronto-based Porter Airlines Inc.

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The regional carrier does not have a line-by-line request for aid but is looking for help in bridging the complete shutdown of flights and the planned return of service on June 1, Mr. Cicero said by phone. Porter employs 1,500 people and has issued layoff notices to the “vast majority” of them, retaining a core group to wind down operations and prepare to restart.

Air Canada, WestJet and other domestic carriers have halted most international routes and are operating so-called rescue flights to bring Canadians home after Canada closed its borders to non-residents.

Air Canada’s pilots union said Tuesday that it has come to an agreement with the airline to limit the number of job losses. The deal reduces pay, allows early retirement and includes a plan for a maximum of 600 layoffs “if required.”

“Due to the complexity of pilot training, the precise number of positions immediately affected is still unclear, and we will be working with Air Canada in the coming days and weeks to better understand the situation,” said Michael McKay, chairman of the Air Canada Pilots Association, which represents 4,400 pilots at Air Canada and Air Canada Rouge. “We join our fellow unions in welcoming financial support from the federal government for our hard-hit industry.”

Major Canadian airports stand to lose a combined $2.2-billion in revenues in 2020 for a year-over-year decline of 51 per cent, the Canadian Airports Council said. The number of passengers is expected to fall as much as 71 per cent in the March-to-June period for a full-year drop of 42 per cent.

recovery may not come for

six months after crisis

All previous pandemics had a V-shape,

but there was no recession

Avian Flu (2005)

RPKs to, from and

within Southeast Asia

SARS (2003)

North American

Airlines RPKs

SARS (2003)

Asia Pacific

Airlines RPKs

Avian Flu (2013)

Asia Pacific

Airlines RPKs

SARS (2003)

China Domestic

Market RPKs

MERS Flu (2015)

RPKs to, from and

within South Korea

Index (crisis month=100)

120

110

100

90

80

70

60

50

40

RPK=Revenue Passenger Kilometers

30

20

10

-3

-2

-1

0

1

2

3

4

5

6

7

8

9

10

11

12

Months before and after the start of the crisis

JOHN SOPINSKI/THE GLOBE AND MAIL

SOURCE: IATA Economics

recovery may not come for

six months after crisis

All previous pandemics had a V-shape,

but there was no recession

SARS (2003)

North American

Airlines RPKs

SARS (2003)

China Domestic

Market RPKs

Avian Flu (2013)

Asia Pacific

Airlines RPKs

Avian Flu (2005)

RPKs to, from and

within Southeast Asia

MERS Flu (2015)

RPKs to, from and

within South Korea

SARS (2003)

Asia Pacific

Airlines RPKs

Index (crisis month=100)

120

110

100

90

80

70

60

50

40

RPK=Revenue Passenger Kilometers

30

20

10

-3

-2

-1

0

1

2

3

4

5

6

7

8

9

10

11

12

Months before and after the start of the crisis

JOHN SOPINSKI/THE GLOBE AND MAIL

SOURCE: IATA Economics

recovery may not come for six months after crisis

All previous pandemics had a V-shape, but there was no recession

SARS (2003)

North American

Airlines RPKs

SARS (2003)

China Domestic

Market RPKs

Avian Flu (2013)

Asia Pacific

Airlines RPKs

SARS (2003)

Asia Pacific

Airlines RPKs

Avian Flu (2005)

RPKs to, from and

within Southeast Asia

MERS Flu (2015)

RPKs to, from and

within South Korea

Index (crisis month=100)

120

110

100

90

80

70

60

50

40

30

RPK=Revenue Passenger

Kilometers

20

10

-3

-2

-1

0

1

2

3

4

5

6

7

8

9

10

11

12

Months before and after the start of the crisis

JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: IATA Economics

The airports, which are owned by the federal government and operated by non-profit authorities, have seen landing, terminal and passengers fees plunge. The Canadian Airports Council is asking Ottawa for free rent for a year, cash and relief of some capital investment requirements.

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“Our airports cannot simply wind down operations proportional to the decline in passenger numbers, as operational costs related to safety, runway maintenance and aircraft movements are fixed and cannot be reduced in proportion to reduced traffic,” said Debra Ward, a spokeswoman for the group. “With increased protocols aimed at controlling the spread of COVID‐19 in place at terminals throughout the country, costs at Canada’s airports have increased over the past few weeks.”

Countries such as Singapore, the United States and Sweden have agreed to help their domestic carriers. Mexico has refused.

Sign up for the Coronavirus Update newsletter to read the day’s essential coronavirus news, features and explainers written by Globe reporters.

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