The global airline industry’s representative body, the International Air Transport Association (Iata), has called on African and Middle Eastern governments to provide emergency support to their airlines. This is part of a global campaign for crisis assistance for airlines as air travel disappears because of the Covid-19 pandemic.

The African air transport industry is estimated to make an economic contribution to the continent amounting to $55.8-billion or 2.6% of continental gross domestic product. It supports some 6.2-million jobs.

African and Middle Eastern carriers are undertaking large-scale cost-cutting actions, to lessen the financial effects of Covid-19. But flight bans and restrictions at international and regional levels have caused their revenues to collapse, beyond the reach of even the most extreme cost reduction measures.

“Stopping the spread of Covid-19 is the top priority of governments. But they must be aware that the public health emergency has now become a catastrophe for economies and for aviation,” highlighted Iata director-general and CEO Alexandre de Juniac. “Airlines are fighting for survival. Many routes have been suspended in Africa and [the] Middle East and airlines have seen demand fall by as much as 60% on remaining ones. Millions of jobs are at stake.”

There are several options open to governments to support their airlines and air freight operators. One is direct financial support, to replace the revenues and liquidity lost because of Covid-19-related flight restrictions. Another is tax relief, including rebates for payroll taxes already paid so far this year, and/or extending the tax payment terms for the rest of this year, plus temporarily lifting air ticket taxes and other levies.

A further support option available to governments and/or central banks is the provision of loans and loan guarantees, and corporate bond market support. For airlines, the corporate bond market is an essential source of finance. However, the eligibility criteria for corporate bonds to receive central bank support should be widened and supported by government guarantees.

“Our ask is that airlines, which are essential to all modern economies, are given urgent consideration,” urged Iata regional VP Africa and Middle East Muhammad Al Bakri. “This will help keep them alive and ensure airline staff – and people working in allied sectors – have jobs to come back to at the end of the crisis. It will enable global supply chains to continue functioning and provide the connectivity that tourism and trade will depend on if they are to contribute to rapid post-pandemic economic growth.”