Airlines face bankruptcy without govt support
Airlines face bankruptcy without govt support
Restoring air connectivity on the African continent is vital to rebuilding economies, and governments need to take urgent action to support their aviation industries, or the industry – which is over 100 years old – may not survive.
This sobering statement came from Iata’s Regional Vice President for Africa and the Middle East, Muhammad Albakri, during a virtual press conference today (October 21).
Four airlines across Africa have ceased operations due to the impact of COVID-19 and two are in voluntary administration, with many more in serious financial distress. These include SAA, Comair, Air Mauritius, and SA Express.
Without urgent financial relief, more carriers and their employees were at risk, as was the wider African air transport industry, which supported 7.7 million jobs on the continent, emphasized Albakri.
Hundreds of thousands of airline jobs are at risk if there is a systemic failure in African aviation. And this is not just in aviation but across industries that depend on efficient global connectivity. Much-needed financial relief has been pledged, but little has materialized.
“The situation is critical. Governments and donor organizations need to act fast or the challenge will move from supporting industry in severe distress to the resurrection from bankruptcy,” said Albakri.
He called on African governments to urgently provide financial relief to the aviation and tourism sectors and to ensure the bottlenecks to this relief were addressed immediately.
Albakri further pointed out that governments should abolish quarantines to ensure more airlines could fly. “Effectively, a quarantine means a closed border.” He added that Iata was pushing for testing to replace quarantines.
According to him, the development of a rapid COVID-19 test (with results available in three to five hours) was “making a lot of good progress” but he could not confirm when the test would be available.
Weaker-than-expected recovery
Iata has downgraded its traffic forecast for Africa for 2020 to reflect a weaker-than-expected recovery. The association now expects full-year 2020 passenger numbers in Africa (to/from/within) to reach only 30% of 2019 levels – down significantly from the 45% that was projected in July.
Forward bookings for air travel in the fourth quarter show that the recovery continues to falter. While domestic travel is picking up across Africa as countries reopen their borders, international travel remains heavily constrained as major markets, including the EU, remain closed to citizens of African nations. Currently, residents from only two African countries – Rwanda and Tunisia – are permitted to enter the EU.
“The further fall in passenger traffic in 2020 is more bad news for the aviation industry in Africa. A few months ago, we thought that demand reaching 45% across the continent in 2020 compared with 2019 was as grim as it could get. But with international travel remaining virtually non-existent and a slower than expected pick-up in domestic travel, we have revised our expectations downward to 30%,” said Albakri.
Other facts and figures
- In absolute numbers, the region is expected to see around 45 million travelers in 2020 compared with 155 million in 2019
- In 2021, demand is expected to strengthen to 45% of 2019 levels to reach close to 70 million travelers to/from/within the region.
- A full return to 2019 levels is not expected until late 2023.
Source: www.tourismupdate.co.za/