The global aviation industry worldwide is sagging under the weight of the current coronavirus pandemic, and Africa is no exception. With strong links to China, both for tourism and trade, African airlines are somewhat more exposed to the current disruption than you might think. Pin Africa’s ties to China could expose airlines more than we think. Photo: Getty Back at the start of March, the New York Times reported that disruption from coronavirus could cost African airlines some $40m in revenue. That was based on an estimated issued by the International Air Transport Association (IATA) which, at the end of February, had estimated losses to be in the region of $29bn globally.
However, IATA has recently revised its figures, as the virus has continued to spread and the impacts are felt more widely. The most recent estimation shows potential revenue losses of some $113bn worldwide due to COVID-19.
Based on the impacts SARS had on aviation, IATA now predicts Africa will lose 0.4% of its revenue passenger kilometers (RPK), if the disease is contained within the most affected nations. If the disease is more widespread, the effect could be worst, although IATA didn’t put a monetary value on the losses. Pin Chinese trade and tourism is a big deal to Africa’s airlines, and its countries. Photo: Getty Regardless of the statistics, there’s a big reason that African aviation will suffer greatly from the coronavirus, and that’s its connections with China.
Many African airlines are highly reliant on the Far East for a number of things. Chinese investors have plowed money into African aviation infrastructure , and have made finance options available to airlines for everything from aircraft purchasing to route expansion. Strong Sino-African trade has led several African airlines to start operating flights to China , which has left them exposed to the impact of the coronavirus.
Overall, intercontinental flights are still the bread and butter of Africa’s aviation industry, making up 51% of their business. On average, the revenue of airlines in Africa derive 5% from Chinese flights and another 7% from flights to the Asia-Pacific region. As such, airlines are highly exposed to both the cancellation of these routes, and the drop in demand.
Kenya Airways and RwandAir have both suspended flights to and from China until further notice, as has neighboring Air Tanzania. However, one airline is still flying, and that’s Ethiopian , which has been widely criticized for not dropping […]