‘Nigeria, South Africa hard hit by air travel disruption, losses’
Nigeria and South African yesterday emerged among the hardest hit by the current flight disruptions across the globe.
The disruption, caused by efforts to contain the spread of coronavirus disease pandemic, has grounded over 95 per cent of global commercial air travel and 100 per cent in some countries including Nigeria.
In Africa, Nigeria is the hardest hit after South Africa, with 4.7 million fewer passengers resulting in a $0.99 billion revenue loss, risking 125,400 jobs and $0.89 billion in contribution to Nigeria’s economy.
South Africa’s 14.5 million fewer passengers result in a $3.02 billion revenue loss, risking 252,100 jobs and $5.1 billion in contribution to South Africa’s economy.
The International Air Transport Association (IATA) that released the figures renewed its call for governments’ relief measures as the impacts of the COVID-19 crisis in Africa deepen.
IATA said the region’s airlines could lose $6 billion of passenger revenue compared to 2019. That is $2billion more than was expected at the beginning of the month.
Job losses in aviation and related industries could grow to 3.1 million. That is half of the region’s 6.2 million aviation-related employment. Previous estimate was two million.
Full-year 2020 traffic is expected to plummet by 51 per cent compared to 2019. Previous estimate was a fall of 32 per cent.
Gross Domestic Product (GDP) supported by aviation in the region could fall by $28 billion from $56 billion. The previous estimate was $17.8 billion.
These estimates are based on a scenario of severe travel restrictions lasting for three months, with a gradual lifting of restrictions in domestic markets, followed by regional and intercontinental.
After South Africa and Nigeria comes Ethiopia, with 2.5 million fewer passengers resulting in a $0.43 billion revenue loss, risking 500,500 jobs and US$1.9 billion in contribution to Ethiopia’s economy.
To minimise the impact on jobs and the broader African economy, IATA said it is vital that governments step up their efforts to aid the industry. Some governments in Africa have already taken direct action to support aviation, including Senegal announced $128 million in relief for the Tourism and Air Transport sector; Seychelles has waived all landing and parking fees for April to December 2020; Cote d’Ivoire has waived its Tourism Tax for transit passengers.
As part of its economic support intervention, South Africa is deferring payroll, income and carbon taxes across all industries, which will also benefit airlines domiciled in that country
IATA has also appealed to development banks and other sources of finance to support Africa’s air transport sectors which are now on the verge of collapse.
IATA’s Regional Vice President for Africa and the Middle East, Muhammad Al Bakri, said airlines in Africa are struggling for survival.
“Air Mauritius has entered voluntary administration, South African Airways and SA Express are in business rescue, other distressed carriers have placed staff on unpaid leave or signalled their intention to cut jobs. More airlines will follow if urgent financial relief is not provided. The economic damage of a crippled industry extends far beyond the sector itself. Aviation in Africa supports 6.2 million jobs and $56 billion in GDP. Sector failure is not an option, more governments need to step up,” Al Bakri said.
In addition to vital financial relief, the industry will also need careful planning and coordination to ensure that airlines are ready when the pandemic is contained.
IATA is scoping a comprehensive approach to re-starting the industry when governments and public health authorities allow. A series of virtual regional summits, bringing together governments and industry stakeholders are taking place this week. The main objectives will be understanding what is needed to re-open closed borders, and agreeing solutions that can be operationalised and scaled efficiently.
“As governments struggle to contain the COVID-19 pandemic, an economic catastrophe has unfolded. Re-starting aviation and opening borders will be critical to the eventual economic recovery. Airlines are eager to get back to business when and in a way that it is safe. But starting up will be complicated.
“We need to make sure that the system is ready, have a clear vision of what is needed for a safe travel experience, establish passenger confidence and find ways to restore demand. Cooperation and harmonisation across borders will be essential to restart aviation,” Al Bakri said.