Iata calls African countries to support their airlines during the Covid-19 crisis

2nd April 2020

By: Rebecca Campbell

Creamer Media Senior Deputy Editor

     

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The global representative organisation for the airline industry, the International Air Transport Association (Iata), issued a call on April 2 for African and Middle Eastern governments to financially support their airlines, directly and/or indirectly. This was because of the havoc being wrought on the sector by government-imposed flight and travel restrictions and border closures, intended to counter the Covid-19 pandemic.

“The air transport industry is an economic engine, supporting up to 8.6-million jobs across Africa and the Middle East and $186-billion in GDP [gross domestic product],” highlighted Iata regional VP: Africa and the Middle East Muhammad Al Bakri. “Every job created in the aviation industry supports another 24 jobs in the wider economy. … Airlines have demonstrated their value in economic and social development in Africa and the Middle East and governments need to prioritise them in rescue packages.”

Regarding Africa, Iata forecast that African airlines could lose revenues of $4-billion. This would represent a 32% fall in comparison to last year. Iata also provided a country-by-country breakdown for five of the continent’s top air travel markets. These were Egypt, Ethiopia, Kenya, Nigeria and South Africa.

Egypt was predicted to see a fall in passenger numbers of 9.5-million. This would result in a revenue loss of $1.6-billion. For the wider Egyptian economy, nearly 205 560 jobs would be endangered, with an about $2.4-billion blow to GDP.

For Ethiopia, Iata expected 1.6-million fewer passengers and revenue losses of $300-million. This would put 327 062 jobs at risk and be a $1.2-billion hit to the economy.

Kenya would lose 2.5-million passengers and $540-million in revenues. In danger would be 137 965 jobs and $1.1-billion of GDP.

Nigeria would see 3.5-million fewer passengers, with a resulting $760-million loss in revenues. Imperilled would be 91 380 jobs and a $650-million contribution to the country’s economy.

In the case of South Africa, passenger numbers would fall by 10.7-million and revenues by $2.29-billion. This would put 186 850 jobs and a contribution to the economy of $3.8-billion at risk.

Iata urged governments to provide a range of support measures for airlines. These would include direct financial support; tax relief; and loans, loan guarantees and support for the corporate bond market. The association acknowledged that some African governments were providing or favourably considering tax relief for airlines. These included Angola, Cabo Verde and Rwanda.

Iata also called on the various national aviation regulators to support the sector. “Some regulators are taking positive action,” he reported. “We are grateful to the [sic] Ghana, Morocco, the UAE [United Arab Emirates], Saudi Arabia and South Africa for agreeing a full-season waiver to the slot use rule. This will enable airlines and airports [to have] greater flexibility for this season and greater certainty for summer. But there is more to do on the regulatory front. Governments need to recognise that we are in a crisis.”

Edited by Creamer Media Reporter

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