Restrictions Slow Africa’s Aviation Rebound

The damage to air travel from COVID-19 extends into the long-term as African air travel is severely impacted with a slow rebound of the continent’s airlines, Wole Shadare writes  

 

Slow measures

The commercial aviation industry rebound from COVID-19 is underway, with the number of flights starting to gradually increase, but widespread recovery could take several years. Most governments in Africa have eased lock-down with the lifting of ban on air travel.

Domestic air travel in many parts of the continent was used to test their preparedness for international flight operations. In many parts of the continent and, indeed, Nigeria, international flights have really not resumed fully with some restrictions on the number of flights that can come in at any point in time. Flights are being staggered to ensure that the country does not escalate the coronavirus pandemic at a time the curve is being flattened.

Consequences

But all these measures still have great consequences on airline operations coupled with the slow recovery rate. Global airlines, according to experts, are not expected to see quick recovery in the next three years to pre-COVID-19 period. The situation is very dire for the carriers, not least Nigerian carriers. Interestingly, despite bailouts from many governments, governments have uniformly done enough to support the industry.

The response actions at a national level have been varied. Nigeria is still at a cross road over bailout for the airlines and sector as a whole. It has been up and down discussion that seems not to be yielding result. The country urgently needs money to run the economy.

The carriers are in serious financial mess. The continued impact of COVID-19 on the carriers could see them face extinction if nothing is urgently done.

Airlines under pressure

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.

“The reality is that airlines are under pressure and if nothing is done by early July many African airlines will go insolvent,” says Abderahmane Berthé, secretary general of the African Airlines  Association (AFRAA), the continent’s industry body. Most were in financial turmoil before Covid-19 and the loss of virtually all passenger traffic due to widespread lockdowns has exacerbated this trend.

Traffic volumes reduced by 45 per cent in March, 86.4 per cent in April and 90.3 per cent in May leading to a total estimated revenue loss of $8.1bn in 2020. If this continues, most airlines will need to source external funding or risk going bankrupt.

Great examples

While governments and taxpayers are hesitant to pile more funds into chronically unprofitable ventures, organisations like AFRAA and IATA have repeatedly called on African governments for decisive action. Great examples Senegal’s provision of $128 million to its tourism and air transport sector is one of the few examples of public support in Africa. Rwanda’s government increased the allocation in the national budget to RwandAir from $127 million to $152 million.

Yet, most governments simply cannot afford to support a sector which requires large amounts of capital and promises little in the way of immediate return. More than 35 African countries have requested  $13 billion in emergency assistance from the IMF since the outbreak of Covid-19.

The airline industry has received little support as policymakers prioritise key sectors of the economy and the health response. Advocates of the airline industry argue that governments must see aviation as a long-term investment and one which is critical to rebuilding battered economies.

Damage

“We don’t want to be pessimistic but without the help that has been shown and demonstrated by other governments across the world, all the good work that has been done over the past decade to grow the airline business in Africa will go in vain,” says Muhammad Ali Albakri, IATA’s regional vice president for Africa and the Middle East. IATA had also warned that the damage being done to the African aviation industry and on economies by the shutdown of air traffic owing to the COVID-19 has deepened.

According to new data published last week by the Air Transport Action Group of which IATA is a member disclosed that 4.5 million African jobs will be lost in aviation and industries supported by aviation in 2020.

This is well over half of the region’s 7.7 million aviationrelated employment. 172,00 jobs will be lost in aviation alone in 2020. This is about 40 per cent of the region’s 440,000 aviation jobs. Gross Domestic Product (GDP) supported by aviation in the region will fall by up to $37 billion. This is 58 per cent below pre COVID-19 levels.

“The breakdown in air connectivity in Africa has severe social and economic consequences for millions. No income means the lack of a social safety net for many. Governments need to do all they can to reconnect the continent safely.

“Keeping borders closed, or imposing measures such as quarantines, that deter air travel, will result in many more livelihoods being lost and further economic shrinkage along with hardship and poverty,” said Muhammad Albakri,

Testing to restart

To minimise the impact on jobs and the broader African economy, an accelerated recovery of air transport across the region is paramount. This can be achieved through COVID- 19 testing as an alternative to restrictive quarantine measures

Thirty-one countries in Africa are opening their borders to regional and international air travel. In 22 countries, however, passengers are still subject to a mandatory 14-day quarantine.

This effectively stops people from travelling. IATA is calling for the systematic testing of passengers before departure. This will enable governments to safely open borders without quarantine and better support recovery efforts.

Last line

Quarantine measures are crippling the industry’s recovery and hampering its ability to support social and economic development. Testing for COVID-19 will enable Africa and the world to safely re-connect and recover.

Airlines under pressure

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.

“The reality is that airlines are under pressure and if nothing is done by early July many African airlines will go insolvent,” says Abderahmane Berthé, secretary general of the African Airlines  Association (AFRAA), the continent’s industry body. Most were in financial turmoil before Covid-19 and the loss of virtually all passenger traffic due to widespread lockdowns has exacerbated this trend.

Traffic volumes reduced by 45 per cent in March, 86.4 per cent in April and 90.3 per cent in May leading to a total estimated revenue loss of $8.1bn in 2020. If this continues, most airlines will need to source external funding or risk going bankrupt.

Great examples

While governments and taxpayers are hesitant to pile more funds into chronically unprofitable ventures, organisations like AFRAA and IATA have repeatedly called on African governments for decisive action. Great examples Senegal’s provision of $128 million to its tourism and air transport sector is one of the few examples of public support in Africa. Rwanda’s government increased the allocation in the national budget to RwandAir from $127 million to $152 million.

Yet, most governments simply cannot afford to support a sector which requires large amounts of capital and promises little in the way of immediate return. More than 35 African countries have requested  $13 billion in emergency assistance from the IMF since the outbreak of Covid-19.

The airline industry has received little support as policymakers prioritise key sectors of the economy and the health response. Advocates of the airline industry argue that governments must see aviation as a long-term investment and one which is critical to rebuilding battered economies.

Damage

“We don’t want to be pessimistic but without the help that has been shown and demonstrated by other governments across the world, all the good work that has been done over the past decade to grow the airline business in Africa will go in vain,” says Muhammad Ali Albakri, IATA’s regional vice president for Africa and the Middle East. IATA had also warned that the damage being done to the African aviation industry and on economies by the shutdown of air traffic owing to the COVID-19 has deepened.

According to new data published last week by the Air Transport Action Group of which IATA is a member disclosed that 4.5 million African jobs will be lost in aviation and industries supported by aviation in 2020.

This is well over half of the region’s 7.7 million aviationrelated employment. 172,00 jobs will be lost in aviation alone in 2020. This is about 40 per cent of the region’s 440,000 aviation jobs. Gross Domestic Product (GDP) supported by aviation in the region will fall by up to $37 billion. This is 58 per cent below pre COVID-19 levels.

“The breakdown in air connectivity in Africa has severe social and economic consequences for millions. No income means the lack of a social safety net for many. Governments need to do all they can to reconnect the continent safely.

“Keeping borders closed, or imposing measures such as quarantines, that deter air travel, will result in many more livelihoods being lost and further economic shrinkage along with hardship and poverty,” said Muhammad Albakri,

Testing to restart

To minimise the impact on jobs and the broader African economy, an accelerated recovery of air transport across the region is paramount. This can be achieved through COVID- 19 testing as an alternative to restrictive quarantine measures

Thirty-one countries in Africa are opening their borders to regional and international air travel. In 22 countries, however, passengers are still subject to a mandatory 14-day quarantine.

This effectively stops people from travelling. IATA is calling for the systematic testing of passengers before departure. This will enable governments to safely open borders without quarantine and better support recovery efforts.

Last line

Quarantine measures are crippling the industry’s recovery and hampering its ability to support social and economic development. Testing for COVID-19 will enable Africa and the world to safely re-connect and recover.

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