IATA: COVID-19 threatens Nigerian, other airlines

The International Air Transport Association (IATA) said African airlines had lost $4.4 billion in revenue to Coronavirus as at March 11, 2020.

Multiple flights have been cancelled or temporarily suspended across Africa as airlines struggle to cope with falling demand following the spread of coronavirus.

Already, Nigerian carriers like their counterparts in the region are faced with the reality of the pandemic.

Since the past one month, flight operations have been hampered by low load factor, which forced airlines to crash fares below the cost of operation.

Last week, airlines were forced to suspend operations. Aero Contractors was the first to announce the suspension of flight operation before the total lock down by Lagos State Government.

IATA recently warned that Nigeria was at risk of losing 2.2 million overseas-bound passengers and $434 million revenue loss, if the coronavirus spread continues to escalate.

The association that represents some 290 airlines said the gloomy outlook was not peculiar to Nigeria, but spreads across the region and warrant emergency support for the airlines.

IATA, in a market analysis released Thursday, appealed to governments in Africa and the Middle East, to provide emergency support to airlines as they fight for survival due to the evaporation of air travel demand as a result of the covid-19 crisis.

IATA had published on March 5, the disruptions from covid-19 could result in 853,000 loss in passenger volumes and $170 million loss in base revenues in Nigeria.

The disruptions to air travel could also put at risk over 22,200 jobs in the country. If the situation spreads further, approximately 2.2 million passengers and $434 million of revenues could be lost.

IATA’s Regional Director for Advocacy and Strategic relations in Africa, Adefunke Adeyemi said passenger demand for Africa had reduced significantly.

International bookings in Africa went down by 20 per cent in March and April, while domestic bookings have fallen by about 15 per cent in March and 25 per cent in April, according to data from IATA.

There are indications that the situation could worsen with the continent’s carriers shutting down operations because of the pandemic.

“Not as many passengers are traveling to, from and within Africa because of the outbreak. In terms of the impact on the aviation industry, the numbers we released show Africa taking a hit in terms of revenue,” Adeyemi said.

One of the reasons Africa’s aviation industry is hit hard by the spread of the virus is its large trade and travel relations with China, where the outbreak started.

According to a report by QZ Africa, Air flight between China and Africa has increased by 630% in the last decade, with airlines like Ethiopia air flying in about 1, 500 passengers  from China every day.

Over the past 20 years, China and Africa have become close trade partners with China expanding its economic and political ties on the continent.

In January it became evident that the Covid-19 coronavirus was going to disrupt the global economy – and so it did.

Global airlines responded by cancelling flights to the Chinese mainland and using codeshare agreements and alliances to pick up and drop passengers in either Hong Kong or Taiwan.

IATA said the virus has resulted in global airlines losing $200 billion. On January 30, African airlines made a series of announcements about suspending services to China.

RwandAir, Kenya Airways and Air Mauritius suspended all flights until further notice. SAA had already axed Hong Kong as a result of the airline’s own financial troubles.