Airlines I’ll Go Bust Without Govts’ Support-IATA DG

Director-General of International Air Transport Association (IATA) Alexandre de Junaic has predicted tough times for African airlines, saying airlines will go bust without support from governments in the form of bailout.

He disclosed that already, four African carriers have ceased operations and two are in administration, stressing that without financial relief, many others will follow.

Just last week, Nigerian government harkened to plea of stakeholders and airline operators by releasing N4b to struggling carriers which operations are threatened by lack of funds to sustain their operations.

De Juniac de Juniac in his remarks at the 52nd African Airlines Association (AFRAA) Annual General Assembly (AGA) held on Monday said over $31 billion in financial support had been pledged by African governments, international finance bodies and other institutions, including the African Development Bank, the African Union and the International Monetary Fund.

He however called on the continent’s governments to redeem their pledges to the airlines, stating, “Unfortunately, pledges do not pay the bills. And little of this funding has materialised”.

He disclosed that the region’s traffic is down 89% with revenue loses expected to reach $6 billion. According to him, this figure is likely to be revised downwards in “our next forecast to be released later this month”.

“The consequences of the breakdown in connectivity are severe. Five million African livelihoods are at risk and aviation-supported Gross Domestic Product (GDP) could fall by as much as $37 billion. That’s a 58% fall”.

Describing the situation as the darkest days in aviation’s history, he urged  leaders great aviation industry to share with him continued confidence in the future.

“Our customers want to fly. They desire the exploration that aviation enables. They need to do international business that aviation facilitates. And they long to reunite with family and loved ones.”

“Our industry will, no doubt, be changed by this crisis. But flying will return. Airlines will be back in the skies. The resilience of our industry has been proven many times. We will rise again. We are the business of freedom. For Africa that is the freedom to develop and thrive. And that is not something people on this continent will forget or lose their desire for”.

The continent’s airlines are in the middle of the biggest crisis the sector has ever faced. The leaders are in difficult situations of what to do on how to rescue their crumbling airlines.

South African Airways before now was already at the brink of collapse with South African government unsure of how best to rescue the 86 year old carrier.

Once the continent’s leading airline, South African Airways is on the brink of collapse. The firm is insolvent and the government is looking for a buyer. It has received state bailouts of almost $4 billion but still has an outstanding debt of $613 million.

The continent’s airlines will go bust without bailout. Already four African carriers have ceased operations and two are in administration. Without financial relief, many others will follow.

In April, Air Mauritius (AM) was the first African airline to enter voluntary administration as result of the crisis, while South African Airways (SAA) has been in a form of business protection since last December. British Airways’ South African franchisee Comair filed for business rescue in May.

Though industry stakeholders are hopeful that modest traffic will resume in November, analysts believe the sector may take far longer to recover.

African Airline Association (AFRAA) estimates that traffic volumes will not return to pre-Covid levels until 2022, predicting a 40% recovery in Q3 and 70% in Q4 of this year.

Wole Shadare