COVID-19: IATA renews call for relief measures for African Airlines

The International Air Transport Association (IATA) has renewed its call for relief measures for African Airlines as impact of COVID-19 pandemic in Africa deepens.

Its Regional Vice President for Africa and Middle East, Muhammed Al-Bakri, made the call on Thursday in a statement in Lagos.

Al-Bakri said that IATA had also appealed to development banks and other sources of finance to support Africa’s air transport sectors which were now on the verge of collapse.

“Airlines in Africa are struggling for survival. Air Mauritius has entered voluntary administration, South African Airways and SA Express are in business rescue, other distressed carriers have placed staff on unpaid leave or signalled their intention to cut jobs.

“More airlines will follow, if urgent financial relief is not provided. The economic damage of a crippled industry extends far beyond the sector itself.

“Aviation in Africa supports 6.2 million jobs and 56 billion dollars in GDP. Sector failure is not an option, more governments need to step up,” Al- Bakri said.

He said that the region’s airlines could lose six billion dollars of passengers revenue compared to 2019, that is two billion dollars more than expected at the beginning of the month.

“Job losses in aviation and related industries could grow to 3.1 million. That is half of the region’s 6.2 million aviation-related employment as the previous estimate was two million.

“Full-year 2020 traffic is expected to plummet by 51 per cent compared to 2019. Previous estimate was a fall of 32 per cent.

“GDP supported by aviation in the region could fall by 28 billion dollars from 56 billion dollars. Previous estimate was 17.8 billion dollars,” Al-Bakri said.

He said these estimates were based on a scenario of severe travel restrictions lasting for three months, with a gradual lifting of restrictions in domestic markets, followed by regional and intercontinental.

Al-Bakri said that the countries hardest hit include: South Africa, Nigeria, Ethiopia, Kenya, Tanzania, Mauritius, Mozambique, Ghana, Senegal and Cape Verde.

He said Nigeria had 4.7 million fewer passengers resulting in a 0.99 billion dollar revenue loss, risking 125,400 jobs and 0.89 billion dollar in contribution to the country’s economy.

According to him, South Africa had 14.5 million fewer passengers resulting in a 3.02 billion U.S dollars revenue loss, risking 252,100 jobs and 5.1 billion U.S dollars in contribution to South Africa’s economy.

He said: “2.5 million fewer passengers resulting in a 0.43 billion dollars revenue loss, risking 500,500 jobs and 1.9 billion dollars in contribution to Ethiopia’s economy.

“3.5 million fewer passengers resulting in a 0.73 billion dollars revenue loss, risking 193,300 jobs and 1.6 billion dollars in contribution to Kenya’s economy.

“1.5 million fewer passengers resulting in a 0.31 billion dollars revenue loss, risking 336, 200 jobs and 1.5 billion dollars in contribution to Tanzania’s economy.

“3.5 million fewer passengers resulting in a 0.54 billion dollars revenue loss, risking 73,700 jobs and two billion dollars in contribution to Mauritius’ economy.

“2.8 million fewer passengers resulting in a 0.38 billion dollars revenue loss, risking 284,300 jobs and 1.6 billion dollars in contribution to Ghana’s economy.”

Al-Bakri said to minimise the impact on jobs and the broader African economy, it was vital that governments should step up their efforts to aid the industry.

He said that some governments in Africa had already taken direct action to support the aviation industry.

According to him, Senegal announced 128 million dollars in relief for the tourism and air transport sector.

He said Seychelles had also waived all landing and parking fees for April to December, while Cote d’Ivoire had waived its tourism tax for transit passengers.

“As part of its economic support intervention, South Africa is deferring payroll, income and carbon taxes across all industries, which will also benefit airlines domiciled in that country, but more help is needed.

“IATA is calling for a mixture of direct financial support loans, loan guarantees and support for the corporate bond market tax relief,” Al-Bakri said.

He said looking ahead, in addition to vital financial relief, the industry would also need careful planning and coordination to ensure that airlines were e ready when the pandemic is contained.

“IATA is scoping a comprehensive approach to restarting the industry when governments and public health authorities allow.

“A series of virtual regional summits, bringing together governments and industry stakeholders are taking place this week,” he said.

Al-Bakri said the main objectives would be understanding what was needed to re-open closed borders and agreeing solutions that could be operationalised and scaled efficiently

“As governments struggle to contain the COVID-19 pandemic, an economic catastrophe has unfolded.

“Re-starting aviation and opening borders will be critical to the eventual economic recovery. Airlines are eager to get back to business when and in a way that it is safe but starting up will be complicated.

“We need to make sure that the system is ready, have a clear vision of what is needed for a safe travel experience, establish passenger confidence and find ways to restore demand,” he said.

Al-Bakri, however, said that cooperation and harmonisation across borders would be essential to restart aviation .

Photo credit: theedgemarkets

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