The African travel industry is in grave danger if governments do not provide financial relief, according to the International Air Transport Association (IATA), their potential loss is estimated at $4 billion translating to 32 percent dip in revenue this year as commercial flights continue to be grounded.
IATA adds that passenger demand for African airlines’ traffic slipped 1.1% in February, versus a 5.6% traffic increase recorded in January and the weakest outcome since 2015.
The decline was driven by around a 35% year-on-year traffic fall in the Africa-Asia market. Capacity rose 4.8%, however, and load factor sagged 3.9 percentage points to 65.7%, lowest among regions.
Some of the impacts at the national level include:
South Africa: 10.7 million fewer passengers resulting in a $2.29 billion revenue loss, risking 186,850 jobs and $3.8 billion in contribution to South Africa’s economy.
Nigeria: 3.5 million fewer passengers resulting in a $ 0.76 billion revenue loss, risking 91,380 jobs and $0.65 billion in contribution to Nigeria’s economy.
Ethiopia: 1.6 million fewer passengers resulting in a $0.3billion revenue loss, risking 327,062 jobs and $1.2 billion in contribution to Ethiopia’s economy.
Kenya: 2.5 million fewer passengers resulting in a $0.54 billion revenue loss, risking 137,965 jobs and $1.1 billion in contribution to Kenya’s economy.
Egypt: 9.5 million fewer passengers resulting in a $1.6 billion revenue loss, risking almost 205,560 jobs and around $2.4 billion in contribution to the Egyptian economy.
Jobs are at risk:
— IATA (@IATA) April 2, 2020
“To minimize the broad damage that these losses would have across the African and Middle East economies, it is vital that governments step up their efforts to aid the industry,” says IATA.
“This is aviation’s darkest hour and it is difficult to see a sunrise ahead unless governments do more to support the industry through this unprecedented global crisis,” said Alexandre de Juniac, IATA’s Director General and CEO.
IATA is calling for a mixture of direct financial support, loans, loan guarantees and support for the corporate bond market and tax relief.
“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. Every job created in the aviation industry supports another 24 jobs in the wider economy. Governments must recognise the vital importance of the air transport industry, and that support is urgently needed. Airlines are fighting for survival in every corner of the world. Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business. Failure by Governments to act now will make this crisis longer and more painful. Airlines have demonstrated their value in economic and social development in Africa and the Middle East and governments need to prioritize them in rescue packages. Healthy airlines will be essential to jump-start the Middle East and global economies post-crisis,” said Muhammad Al Bakri, IATA’s regional vice president for Africa and the Middle East.
Kenya Airways requested an undisclosed sum from the government to help to cover critical operational costs like salaries.