COVID-19, the highly contagious respiratory disease caused by the novel coronavirus, has battered Africa’s aviation industry, with billions of dollars already lost, millions of workers rendered jobless and several airlines on the brink of collapse.
With borders closed, planes grounded, airports shut and embassies under lock and key, the International Air Transport Association (IATA) is predicting a catastrophic hit for the airline industry around the world and in Africa. At least 8.6 million people depend on aviation for their livelihoods in Africa and the Middle East.
In a statement on June 9, 2020, IATA said African airlines are expected to lose at least $2 billion in 2020, but the losses already recorded are many times more than the forecast. The losses would be huge if there is a second wave of the deadly virus, IATA added. Globally, airlines would lose a minimum of $84.3 billion in 2020 for a net profit margin of -20.1%.
Revenues will fall 50% to $419 billion from $838 billion in 2019. In 2021, losses are expected to be cut to $15.8 billion as revenues rise to $598 billion, IATA said in its gloomy aviation outlook for this year.
When the skies reopen, several airlines may have already gone under. IATA estimates that South Africa lost about $3.2 billion in revenues between April and June with about 269,000 jobs at risk as of June.
Nigeria lost about $1.1 billion in revenues between April and June with 139,500 jobs at risk as of June. The story is not different for Ethiopia where half a billion dollars in revenues were lost between April and June with 530,000 jobs at risk as of June. Egypt has lost about $2.3 billion between April and June with about 297,200 jobs at risk as of June.
The latest assessment from IATA Economics shows that the outlook at national level has worsened for major aviation markets in the region since April.
For example, the passenger numbers, airline revenue and jobs at risk impacts for the four biggest AME markets have declined across every metric:
COUNTRY APRIL -PAX DEMAND JUNE – PAX DEMAND APRIL – ARL REVENUE JUNE – ARL REVENUE APRIL – JOBS AT RISK JUNE – JOBS AT RISK South Africa -14.5 million -15.61 million -3.02 billion -3.2 billion – 251,100 -269,900 Nigeria -4.7 million -5.32 million -0.99 billion -1.1 billion – 125,400 -139,500 Kenya -3.5 million -3.75 million -0.73 billion -0.8 billion – 193,300 – 207,800 Ethiopia -2.5 million -2.62 million -0.43 billion -0.5 billion -500,500 – 530,400 Saudi Arabia -35 million -36.41 million -7.2 billion -7.4 billion -287,500 – 299,200 UAE -31 million -32.33 million -6.8 billion -7.1 billion – 378,700 – 392,900 Egypt -13 million -13.79 million -1.66 billion -2.3 billion – 205,560 – 297,200 Qatar -3.6 million -1.32 million -1.7 billion -1.7 billion – 53,640 – 72,700 Jordan -3.5 million -3.78 million -0.7 billion -0.7 billion – 34,000 – 36,660
“Financially, 2020 will go down as the worst year in the history of aviation. On average, every day of this year will add $230 million to industry losses. In total that’s a loss of $84.3 billion. It means that—based on an estimate of 2.2 billion passengers this year—airlines will lose $37.54 per passenger. That’s why government financial relief was and remains crucial as airlines burn through cash,” said Alexandre de Juniac, IATA’s Director General and CEO.
“Provided there is not a second and more damaging wave of COVID-19, the worst of the collapse in traffic is likely behind us. A key to the recovery is universal implementation of the re-start measures agreed through the International Civil Aviation Organization (ICAO) to keep passengers and crew safe. And, with the help of effective contact tracing, these measures should give governments the confidence to open borders without quarantine measures. That’s an important part of the economic recovery because about 10% of the world’s GDP is from tourism and much of that depends on air travel. Getting people safely flying again will be a powerful economic boost,” said de Juniac.
Early this month, IATA urged governments in Africa to implement alternatives to quarantine on arrival that would allow economies to re-start while avoiding the importation of COVID-19 cases.
Government-imposed quarantine measures in 36 countries across Africa and the Middle East (AME) account for 40% of all quarantine measures globally. With over 80% of travelers unwilling to travel when quarantine is required, the impact of these measures is that countries remain in lockdown even if their borders are open, IATA said.
According to IATA, economies across AME have been devastated by COVID-19, and the aviation industry has been especially hard-hit. Across the region, more than 8.6 million jobs in the airline industry and those businesses supported by aviation are at risk. Thousands of jobs have already been lost due to the shutdown of air traffic.
“It is critical that AME governments implement alternatives to quarantine measures. AME has the highest number of countries in the world with government-imposed quarantine measures on arriving passengers. The region is effectively in complete lockdown with the travel and tourism sector shuttered. This is detrimental in a region where 8.6 million people depend on aviation for their livelihoods,” said Muhammad Albakri, IATA’s Regional Vice President for Africa and the Middle East.