- Insists airlines in region may lose $6bn
The International Air Transport Association (IATA) has renewed its call for government relief measures as the impacts of the COVID-19 crisis in Africa deepen.
IATA also said the African region’s airlines could lose $6 billion of passenger revenue compared to 2019. That is $2billion more than what was expected at the beginning of the month.
It said 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; previous estimate was 2 million.
IATA added that full-year 2020 traffic is expected to plummet by 51 per cent compared to 2019; previous estimate was a fall of 32 per cent.
The global body also noted that GDP supported by aviation in the region could fall by $28 billion from $56 billion, as previous estimate was $17.8 billion.
“These estimates are 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,” IATA said.
It further revealed that the countries hardest hit in the continent include South Africa, which has lost 14.5 million fewer passengers resulting in a $3.02 billion revenue loss; risking 252,100 jobs and $5.1 billion in contribution to the South Africa’s economy
Also, Nigeria loses 4.7 million fewer passengers, resulting in a $0.99 billion revenue loss; risking 125,400 jobs and $0.89 billion in contribution to the Nigeria’s economy; Ethiopia 2.5 million fewer passengers resulting in a $0.43 billion revenue loss, and risking 500,500 jobs as well as $1.9 billion in contribution to the Ethiopia’s economy.
Kenya also recorded 3.5 million fewer passengers resulting in a $0.73 billion revenue loss; risking 193,300 jobs and $1.6 billion in contribution to the Kenya’s economy
IATA said to minimise the impact on jobs and the broader African economy, it is vital that governments step up their efforts to aid the industry.
According to the body, “Some governments in Africa have already taken direct action to support aviation, including Senegal, which announced US$128 million in relief for the tourism and air transport sector; Seychelles has waived all landing and parking fees for April to December 2020; Cote d’Ivoire has also waived its tourism tax for transit passengers, and 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.”
It insisted that more help is needed, therefore, calling for a mixture of direct financial support, loans, loan guarantees and support for the corporate bond market and tax relief.
IATA has also appealed to development banks and other sources of finance to support Africa’s air transport sectors, which are 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, and other distressed carriers have placed staff on unpaid leave or signaled 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 in GDP. So sector failure is not an option, as governments need to step up,” IATA’s Regional Vice President for Africa and the Middle East, Muhammad Al Bakri, said.