A KQ plane on flight. PHOTO | FILE | NATION MEDIA GROUP When the novel coronavirus outbreak was first reported in Wuhan, China, it was just a local health problem that morphed into a pandemic and global economic disaster.
The Covid-19 pandemic has left businesses struggling to generate cash to keep the wheels turning and resulted into massive job losses in both the formal and informal sectors of the economy.
The aviation industry finds itself at the centre of the turmoil. The sector, which plays a critical role in growing economies across the world, is, arguably, the most severely affected by the global pandemic.
According to International Air Transport Association (IATA), the aviation industry supports 65.5 million jobs with an economic impact of $2.7 trillion (Sh270 trillion) globally.
It contributes an estimated $55.8 billion (Sh558 billion) to Africa’s economy, at 2.6 per cent of gross domestic product (GDP), and close to 6.2 million job opportunities. In Kenya, the sector contributes up to 4.6 per cent of GDP and supports 410,000 jobs indirectly.
CRISIS
Regrettably, with the current crisis, this contribution is at risk. IATA estimates that, in Africa alone, airlines could lose upwards of $4.6 million (Sh460 million). With a vast majority of operators barely breaking even during good times, one can only imagine what awaits us on the other side of this crisis. This is an unprecedented crisis and, therefore, impossible to have a perfect response.
An important lesson learnt is that one can never be too prepared for a crisis. In addition, plans are, at best, tentative when a situation is fluid. Creativity in solutions is a prerequisite.
When the dust settles, a number of scenarios are likely to play out. First, the industry is likely to take up to two years to return to even 75 per cent of its pre-Covid-19 operations. Full recovery may take longer. Kenya is headed towards the electioneering period and the effect that normally has on business could be an impediment in this recovery.
Secondly, the crisis provides a glimpse of what the future holds. For instance, more business travellers could opt for online meetings and training, hence reduced business travel. Leisure travel may also take time to recover due to reduced disposable income in upper and middle class. Leisure travellers may prefer destinations nearer to home with specific hygiene conditions.
However, an upsurge of demand is likely right at the end of the Covid-19 crisis, which will then […]
