Iata reports that African airlines likely to lose $2-billion this year

7th August 2020

By: Rebecca Campbell

Creamer Media Senior Deputy Editor

     

Font size: - +

The global airline industry’s representative body, the International Air Transport Association (Iata), released, late last month, its latest analysis and forecast regarding the impact of the Covid-19 pandemic on Africa’s airline sector. The continent’s airlines are expected to suffer total losses of $2-billion this year and the entire sector is in danger of collapse, which would imperil $33-billion in African gross domestic product and 3.3-million jobs.

“Over $30-billion in financial support has been pledged to aviation and tourism in Africa,” pointed out Iata regional VP for Africa and the Middle East Muhammed Albakri. “Some of this money has been allocated by governments, but far too little of it has reached its intended recipients.”

The governments of Burkina Faso, Côte d’Ivoire, Rwanda and Senegal have allocated a total of $311-million in direct support to their air transport sectors. The African Development Bank, the African Export Import Bank, the African Union, the International Monetary Fund and some governments have also pledged a further total of $30-billion to support the continent’s air transport and tourism sectors. Unfortunately, the disbursement of this aid has been hampered by red tape, including complicated application and creditworthiness processes, and cumbersome bureaucracy.

“Governments and lenders need to urgently unchoke the bottlenecks so that the money can flow quickly, otherwise it will be too late to prevent closures and job losses,” he urged. “There will be no point in reopening the borders and skies if there is no industry left to speak of that is capable of supporting trade and tourism, which are the key components of any thriving economy.”

Airline flights in Africa during the first half of last month (through to July 19) were 77% lower than in the equivalent period in January (although this did represent an improvement over the lowest point, which was in April, when the number of flights across the continent was 96% below the January figure). In regional terms, the pandemic has caused East African airlines to lose 53% of their passengers and see their revenues fall by 56%, while for North African airlines the figures are 56% and 58% respectively. Southern and West African airlines have both lost 58% of their passengers and experienced revenue falls of 58%.

For the entire continent, air passenger numbers for the whole of this year were expected to be down by 54% year-on-year. Iata now forecasts that recovery would be slower than previously predicted (in its April forecast). African air travel demand is now expected to return to 2019 levels in 2023, a year later than previously hoped.

“The near-term outlook remains highly uncertain,” he said in his presentation. “The risks remain firmly to the downside over the next five years, although it is possible that the industry recovery will be quicker than our baseline suggests. “We have developed two scenarios which . . . suggest average annual growth could be between 0.8% and 3.9% per year. Over the longer term, the fundamental drivers for air transport demand remain favourable for Africa, which is expected to remain one of the world’s fastest-growing regions.”

Iata is urging African countries to harmonise their approaches to restarting their civil aviation sectors. This could be achieved if they all adopted the International Civil Aviation Organisation’s (ICAO’s) Take-Off guidance document. (ICAO is a specialist agency of the United Nations.) At the moment, seven African countries have resumed or announced the imminent resumption of scheduled international air passenger flights. They are Benin, Ethiopia, Ghana, Kenya, Rwanda, Senegal and Tanzania. Together, they account for 19% of Africa’s air passenger traffic. (Note that this list includes nearly all the countries of East Africa.)

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION