How IATA’s $30 billion aid to support African aviation, tourism failed to reach people in need

  • Airlines’ trapped funds in Africa hit $1.3 billion

 

The International Air Transport Association (IATA) said it had helped to secure pledges of $30 billion to support air transport and tourism in Africa from some governments, international finance bodies, and institutions such as the African Development Bank, the African Export-Import Bank, the African Union (AU) and the International Monetary Fund (IMF) but noted that disappointingly, most of this relief failed to reach those in need.

IATA’s Regional Vice President for Africa & Middle East, Mr. Kamil Alwadhi, addressed delegates at the Aviation Africa 2022 Summit in Kigali, Rwanda.

 

Kamil Al-Awadhi

In a similar vein, he took a swipe at countries still keeping airlines’ money, saying that blocked funds remain a severe blight for which there are no excuses, adding that doing so contravenes international civil aviation protocol and is an act of economic self-harm.

He stated that despite these consequences, airlines’ funds remain blocked across the continent. He put airlines’ trapped funds in 12 African countries as of June to more than $1.3 billion

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“We continue to engage with governments withholding airlines funds.   In late August we were very encouraged by Nigeria’s move to release $265 million of blocked funds – about half of what it was withholding. We urge other fund-blocking countries to follow Nigeria’s example and expedite the full release of all airlines’ revenues they are currently withholding”.

He lamented that many African countries ignored IATA’s urgent pleas to provide other forms of relief through reductions and waivers of statutory charges, levies, taxes, and user fees, adding that airlines faced unprecedented losses, and some didn’t survive the financial pressures of the COVID-19 pandemic.

He noted that while airlines worldwide lost a combined $42 billion last year, noting that IATA’s outlook for 2022 sees the global loss reduced to $9.7 billion for the year and a return to industry-wide profit in 2023.  Africa is on track to follow by the end of 2024.

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“The outlook is positive, but the business environment is challenging. The unprecedented price of jet fuel, which is currently trading at a $50a barrel premium over crude, is the biggest obstacle. For the year to date, the price of jet fuel has averaged $143 a barrel. This means airlines will spend$133 billion more for fuel in 2022 than they did last year”, Alwadh stated.

He reiterated that global demand for air travel continues to recover and is now at 74.6% of pre-COVID levels.

He further stated that Africa’s passenger traffic for July was 73.8% of its July 2019 level, hinting that for Rwanda, passenger traffic for July 2022 was 106% of its July 2019 level.

In Eastern Africa, the industry has staged a robust recovery with capacity back to 93.4 percent of 2019 levels.

It is a similar picture in North Africa where capacity is about 6.9 percent down on this time in 2019.

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It is quite different in Southern Africa where traffic remains over 36.5 percent lower than before the pandemic – although the reduced capacity can be attributed to three airlines having gone out of business, one suspending its operations, and what was the sub-region’s largest, shrinking its fleet, network, and schedule by more than 80 percent.

Foreign airlines in flight

However, in Western Africa capacity has outstripped 2019 levels by over 8.7 percent as demand for air travel has returned.

The IATA chief further stated that while we have not seen this kind of chaos in Africa, airports, air navigation services, and civil aviation authorities across the continent must be prepared for the growing number of travellers as recovery continues in Africa.

Wole Shadare