African Airlines to lose $6b in passenger revenues

The two Uganda airlines CRJ 900 planes’ tails decorated with Uganda flag colours at the VVIP Parking Apron of Entebbe International Airport where they were officially welcomed into the country in April. PHOTO BY ABUBAKER LUBOWA 

By MARTIN LUTHER OKETCH

The International Air Transport Association (IATA) has renewed call for Africans governments to
put in place relief measures the Covid-19 crisis ravages the world.

Speaking during an online briefing at the weekend, IATA called for a mixture of direct financial support, loans, loan guarantees and support for the corporate bond market and tax reliefs, especially to the African airlines sector, which is expected to lose at least $6b worth of passenger revenues.

IATA also noted job losses in Africa’s aviation sector and related industries is expected grow to 3.1 million, which is half of employment the entire aviation sector in Africa.

“Airlines in Africa are struggling. 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 signalled intention to cut jobs. More airlines will follow if urgent financial relief is not provided,” said Mr Muhammad Al Bakri, the IATA regional vice president for Africa and the Middle East, during an online briefing.

The economic damage of a crippled industry, he said, will extend far beyond the aviation sector, which generates a combined gross domestic product of $56b.

Mr Al Bakri also noted that in addition to vital financial relief, the industry will also need careful planning and coordination to ensure that airlines are ready to resume operation when the pandemic is contained.
Last year after 18 year, Uganda revived Uganda Airlines but quickly suspended operations due to the impact of Covid-19.

However, IATA did not mention how Uganda Airlines is expected to be affected by the Covid-19 pandemic that has ravaged global economies.

IATA said full-year traffic for 2020 is expected to plummet by 51 per cent compared to 32 per cent in 2019, while gross domestic product is expected to fall by $28b from $56b.

Loss of passengers

According to IATA, South Africa is expected to record 14.5 million less passengers, resulting into a $3.02b revenue loss while Nigeria is likely to register 4.7 million less passengers. Ethiopia is expected to lose about 2.5 million passengers.