New York — The International Air Transport Association warned this week that governments in Africa needed to provide financial relief amid the coronavirus pandemic, estimating that revenue lost by carriers could reach $4 billion, a 32% fall.
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"The air transport industry is an economic engine, supporting up to 8.6 million jobs across Africa and the Middle East and $186 billion in GDP. Every job created in the aviation industry supports another 24 jobs in the wider economy. Governments must recognize the vital importance of the air transport industry, and that support is urgently needed…Failure by governments to act now will make this crisis longer and more painful. Airlines have demonstrated their value in economic and social development in Africa and the Middle East and governments need to prioritize them in rescue packages," said Muhammad Al Bakri, IATA’s Regional Vice President for Africa and the Middle East.
IATA is calling for a mixture of direct financial support to provide relief from the effect of Covid-19 such as, loans, loan guarantees, support for the corporate bond market and tax relief.
Some African nations have taken action with Cape Verde deferring aircraft lease payments, while Rwanda and Angola are considering financial relief for airlines.
"Governments in normal times don’t shy from spending on their aviation industries, but the aviation industry will come out of this a lot smaller — business travel will be greatly reduced and there will be ongoing lockdowns in different countries. There will be consolidation but there is no point supporting a business long term that isn’t going to be viable. Some Middle East and African countries are going to struggle to support their aviation industries and will likely focus on diverting cash to those made unemployed from industries such as tourism and hospitality which are key in countries like Kenya and Egypt," said Robin Mills Friday, CEO of consultant Qamar Energy.
Kenya Airways has sent an emergency notice to the country’s treasury and ministry of transport asking for funds, according to local reports.
While the airline can still operate domestically this only makes up a small percentage of its revenue with international flights halted by the government on March 22, according to Business Daily.
IATA estimates that around 330,000 jobs and $1.2 billion are at stake in Ethiopia’s economy, $3.8 billion and around 190,000 jobs in South Africa’s economy, around 138,000 jobs and […]
