Financial Tribune – The Covid-19 pandemic has had a significant impact on Iran’s aviation industry due to the resulting travel restrictions as well as slump in demand among travelers, which coincided with the peak travel season in Norouz, the Iranian New Year holidays
I ran Airports Company registered a total of 23,223 takeoffs and landings during the first two months of the current Iranian year (March 20-May 20), which indicates a 62% decline compared with the similar period of last year.
More than 2.02 million passengers were transported during the two months under review, indicating a 73% year-on-year decline.
Over 19,509 tons of cargos were handled during the same period, which shows a 75% fall compared with the corresponding period of last year, IAC’s latest report published on its website shows.
A total of 22,363 takeoffs and landings were registered by domestic flights during the two-month period, down 56% YOY. More than 1.98 million passengers and 14,628 tons of cargo were transported domestically, indicating a 67% and 69% decline respectively YOY.
On the international front, 860 takeoffs and landings were registered, down by 92% YOY. A total of 44,492 passengers and more than 4,882 tons of cargo were transported to and from overseas destinations, down 97% and 85% respectively compared with the corresponding period of last year.
Similar to previous IAC reports, Tehran’s Mehrabad International Airport was the busiest Iranian airport during the period under review with 9,349 takeoffs and landings, registering a 54% decline.
The impact of coronavirus has resulted in Iran’s 16 airlines losing up to 30,000 billion rials ($170 million) from Feb. 20 to April 8
The airport handled 852,735 passengers, showing a 65% decline and around 5,977 tons of cargo, indicating a 68% decrease YOY.
Mashhad International Airport was the second busiest airport with 2,124 takeoffs and landings, indicating a 76% YOY decrease. It transported 236,868 passengers and 1,772 tons of cargos, down 82% and 86% respectively year-on-year.
Shiraz International Airport registered 1,800 takeoffs and landings (a 64% YOY decrease), while transporting more than 144,347 passengers (a 72% decline) and over 1,265 tons of cargos showing a 77% decrease YOY. The airport ranked third on the list of Iran’s busiest airports during the two-month period.
In the second Iranian month (April 20-May 20), a total of 13,974 takeoffs and landings were registered, which indicates a 54% decline compared with the similar period of last year.
More than 1.27 million passengers and 10,430 tons of cargos were transported during the month, indicating a 66% and 70% fall respectively YOY.
The report shows 13,508 takeoffs and landings were registered by domestic flights from April 20 to May 20, down 48% YOY. Close to 1.25 million passengers and 8,415 tons of cargo were transported domestically, both indicating a 59% decrease YOY.
On the international front, 466 takeoffs and landings were registered, showing a 90% decrease YOY. A total of 20,585 passengers and more than 2,015 tons of cargo were transported to and from overseas destinations, indicating a 97% and 86% decrease respectively YOY.
Iran Airports Company is an arm of the Ministry of Roads and Urban Development, which manages 54 airports across the country.
Coronavirus Bailout Loans
The Ministry of Cooperatives, Labor and Social Welfare’s Kara.mcls.gov.ir began to accept applications from airlines and other aviation sectors for coronavirus bailout loans worth 24,000 billion rials ($136 million) on June 1.
The Covid-19 pandemic has had a significant impact on Iran’s aviation industry due to the resulting travel restrictions as well as a slump in demand among travelers, which coincided with the peak travel season during Norouz, the Iranian New Year holidays (March 20-April 3).
Official figures say airlines are facing a cash flow crisis as the sector was grounded and travel demand dropped by 90% during Norouz, such that some of them claimed they couldn’t pay their staff.
The number of air passengers reduced by 76% and flights by 90% during the Iranian New Year holidays, known as Norouz, according to latest data released by Iran Airports Company.
The impact of the coronavirus has resulted in Iran’s 16 airlines losing up to 30,000 billion rials ($170 million) from Feb. 20 to April 8, the secretary of the Association of Iranian Airlines, Maqsoud Asadi-Samani, told Fars News Agency.
The 750-trillion-rial ($4.26 billion) rescue package that the government approved following the outbreak of coronavirus in March included 80,000 billion rials (over $454 million) in loans for the transportation sector.
According to Governor of the Central Bank of Iran Abdolnasser Hemmati, the lending rate for the government aid package will be 12% to be repaid within two years.
Commenting on the interest rate, Hemmati said it is reasonable, given the high inflation rate in the country.
“Even if banks set 18% interest on loans, the real interest rate would still be negative when compared to the annual inflation. Any rate below 12% would apparently impose further financial strain on banks,” he said.
Hemmati has said only businesses that did not lay off workers during the corona crisis would be eligible for the loans. He instructed banks to process the loans soon and cut red tape.
Most airlines in the world are facing bankruptcy, according to CAPA—a trusted source of market intelligence for the aviation and travel industry.
British Airways CEO Alex Cruz says the current coronavirus crisis is more serious than any previous aviation crisis.
As the impact of the coronavirus and multiple government travel reactions sweep through the world, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants.
Cash reserves are running down quickly as fleets are grounded and what flights there are operate much less than half full.
Forward bookings are far outweighed by cancellations and each time there is a new government recommendation, it is to discourage flying. Demand is drying up in ways that are completely unprecedented. Normality is not yet on the horizon, Aviation24 reported.