SAA says in the light of the substantial fall in demand for air travel it has reviewed its flight schedule and has decided to operate flights only under circumstances where its load factors and other business considerations weigh in favour of scheduling flights. Photo: Rogan Ward/Reuters
SAA says in the light of the substantial fall in demand for air travel it has reviewed its flight schedule and has decided to operate flights only under circumstances where its load factors and other business considerations weigh in favour of scheduling flights. Photo: Rogan Ward/Reuters

WATCH: African airlines lose $4.4 billion between January and March 11 to Covid-19

By Sizwe Dlamini Time of article published Mar 23, 2020

Share this article:

CAPE TOWN – African airlines lost $4.4 billion (about R78 billion) in revenue during the period between January and March 11, according to a report by the International Air Transport Association (IATA).

Since the end of January, thousands of passenger flights have been cancelled in Africa, said IATA adding that this was expected to increase exponentially with the implementation of additional measures in different countries.

International bookings in Africa are down roughly 20 percent in March and April, domestic bookings have fallen by about 15 percent in March and 25 percent in April, according to the latest data. Ticket refunds have increased by 75 percent in 2020 compared with the same period in 2019 – February 1 to March 11.

IATA appealed to governments in Africa and the Middle East, as part of a worldwide campaign, to provide emergency support to airlines as they were fighting for survival due to the evaporation of air travel demand as a result of the Covid-19 crisis.

IATA’s director-general and chief executive Alexandre de Juniac said the scale of the current industry crisis was much worse and far more widespread than 9.11, SARS or the 2008 Global Financial Crisis.

“Airlines are fighting for survival. Many routes have been suspended in Africa and the Middle East and airlines have seen demand fall by as much as 60 percent on remaining ones. Millions of jobs are at stake. Airlines need urgent government action if they are to emerge from this in a fit state to help the world recover, once Covid-19 is beaten.

“Stopping the spread of Covid-19 is the top priority of governments. But they must be aware that the public health emergency has now become a catastrophe for economies and for aviation,” he said.

Africa’s air transport industry’s economic contribution is estimated at $55.8 billion supporting 6.2 million jobs and contributing 2.6 percent to gross domestic product (GDP). In the Middle East, air transport’s economic contribution is estimated at $130 billion supporting 2.4 million jobs and contributing 4.4 percent to GDP.

This as South African Airways (SAA) cancelled 162 international and regional flights till the end of this month due to low demand and restrictions linked to Covid-19.

SAA, which is under a form of bankruptcy protection and battling for its survival, said: “In the light of the substantial fall in demand for air travel, SAA has reviewed its flight schedule and has decided to operate flights only under circumstances where its load factors and other business considerations weigh in favour of scheduling flights. However, certain flights that have been negatively impacted more than others, are consequently cancelled.”

Emirates also announced on Sunday that it would ground its entire passenger fleet this week and cut staff wages by as much as half because of the coronavirus and its impact on travel demand.

“As a global network airline, we find ourselves in a situation where we cannot viably operate passenger services until countries reopen their borders and travel confidence returns,” Emirates Chairman Sheikh Ahmed bin Saeed al-Maktoum said in a statement.

The Dubai-based airline will stop passenger flights by Wednesday and did not say when they would resume, however, cargo flights will continue.

IATA regional vice president Africa, Middle East Muhammad Al Bakri said several governments in Africa and the Middle East had already committed national aid for Covid-19. 

“Our ask is that airlines, which are essential to all modern economies, are given urgent consideration. This will help keep them alive and ensure airline staff – and people working in allied sectors - have jobs to come back to at the end of the crisis. It will enable global supply chains to continue functioning and provide the connectivity that tourism and trade will depend on if they are to contribute to rapid post-pandemic economic growth,“ he said.

WATCH:



Country-Specific Analysis:

  • South Africa: Consistent with the 'Extensive Spread' Scenario we published on 5 March, the disruptions from Covid-19 could result in 6 million loss in passenger volumes and $1.2 billion loss in base revenues in South Africa. The disruptions to air travel could also put at risk over 102 000 jobs in the country.
  • Kenya: Consistent with the 'Extensive Spread' Scenario we published on 5 March, the disruptions from Covid-19 could result in 622 000 loss in passenger volumes and $125 million loss in base revenues in Kenya. The disruptions to air travel could also put at risk over 36 800 jobs in the country. If the situation spreads further, about 1.6 million passengers and $320 million of revenues can be lost.
  • Ethiopia: Consistent with the 'Extensive Spread' Scenario we published on 5 March, the disruptions from the Covid-19 could result in 479 000 loss in passenger volumes and $79 million loss in base revenues in Ethiopia. The disruptions to air travel could also put at risk more than 98 400 jobs in the country. If the situation spreads further, approximately 1.2 million passengers and $202 million of revenues can be lost.
  • Nigeria: Consistent with the 'Extensive Spread' Scenario we published on 5 March, 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 more than 22 200 jobs in the country. If the situation spreads further, about 2.2 million passengers and $434 million of revenues can be lost.
  • Rwanda: Consistent with the 'Extensive Spread' Scenario published on 5 March, the disruptions from Covid-19 could result in 79 000 loss in passenger volumes and $ 20.4 million loss in base revenues in Rwanda. The disruptions to air travel could also put at risk about 3 000 jobs in the country. If the situation spreads further, about 201 000 passengers and $52 million of revenues can be lost.

IATA said the dramatic travel restrictions and the collapse of passenger demand had severely limited cargo capacity. IATA called on governments to take urgent measures to ensure that air cargo would be available to support the global fight against Covid-19.

IATA requested:

  • Exclude air cargo operations from any Covid-19-related travel restrictions, to ensure life-saving medical products can be transported without disruptions
  • Ensure that standardised measures are in place so that air cargo can continue to move around the world with minimal disruptions
  • Exempt air cargo crew members, who do not interact with the public, from 14-day quarantine requirements
  • Support temporary traffic rights for cargo operations where restrictions may apply
  • Remove economic impediments, such as overfly charges, parking fees, and slot restrictions to support air cargo operations during these unprecedented times

BUSINESS REPORT

Share this article:

Related Articles