Dramatic Decline in Overflights

EghtesadOnline: Following the outbreak of the novel coronavirus, overflights have reduced to an average of 110 per day, an official with Iran Airports Company said.

News ID: ۷۴۹۸۵۶

14 April 2020

Saeed Akbari added that the highest number of overflights these days has been 117, whereas between 900 and 1,000 flights crossed Iranian airspace daily in the first half of last year, Financial Tribune reported.

The second half of the year saw the crash of the Ukraine International Airlines’ Boeing 737-800 near Tehran in January.

Iran’s General Staff of the Armed Forces announced in a statement that the Ukrainian plane was shot down by Iran’s air defense systems “unintentionally” due to “human error”. Investigation into the tragic crash, in which all the 176 people on board died, is ongoing.

Noting that overflight and airport services’ fees are the only sources of income for Iran Airports Company, the official said it has faced resource scarcity over the past two months.

“IAC is a government-run company and does not have the option of resorting to downsizing. In addition, our employees are mostly the elites of the aviation industry, so we can’t afford to lose them,” he said.

Akbari said that even when the coronavirus outbreak ends, it would take a long time for the company to recover from this latest blow.

“Apparently, Iran Airports Company is among businesses entitled to the government’s 750-trillion-rial [$4.6 billion] rescue package. The exact figure of the loan has yet to be determined. The company may have to stop its ongoing development projects and cancel new contracts, or implement pay cuts to stay afloat,” he was quoted as saying by the Persian-daily newspaper Etemad.

The Iranian government has approved a 750-trillion-rial package to help low-income households and struggling businesses impacted by the rapidly spreading coronavirus. The loans will be given to small- and medium-sized enterprises hit hard by the pandemic, according to the website of the Central Bank of Iran.

“The lending rate will be 12% to be repaid within two years,” Abdolnasser Hemmati, the CBI governor, said.

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 rate … Any rate below 12% would apparently impose further financial strain on banks,” he said.

Hemmati said only businesses that do not lay off workers during the corona crisis would be eligible for the loans, while instructing banks to process the loans fast and cut red tape.