Nation risks 125, 000 jobs, $0.99 bn revenue loss Group calls for urgent help to save airlines
The International Air Transport Association (IATA) renewed its call for government relief measures as the impacts of the COVID-19 crisis in Africa deepen.
IATA, in its latest assessment of COVID-19 crisis impact on African airlines and air transport listed Nigeria, South Africa, Ethiopia, Kenya, Tanzania, Mauritius, Mozambique, Ghana, Egypt, Senegal and Cape Verde as countries facing the hardest hit as a result of Coronavirus.
South Africa tops the greatest loser in aviation as it is expected to see14.5 million fewer passengers resulting in a $3.02 billion revenue loss, risking 252,100 jobs and $5.1 billion in contribution to South Africa’s economy.
Nigeria comes second as it expects to see 4.7 million fewer passengers resulting in a $0.99 billion revenue loss, risking 125,400 jobs and $0.89 billion in contribution to Nigeria’s economy.
Nigeria is closely followed by Ethiopia with an estimated 2.5 million fewer passengers resulting in a $0.43 billion revenue loss, risking 500,500 jobs and $1.9 billion in contribution to Ethiopia’s economy.
Kenya will see 3.5 million fewer passengers resulting in a $0.73 billion revenue loss, risking 193,300 jobs and $1.6 billion in contribution to Kenya’s economy; Tanzania 1.5 million fewer passengers resulting in a $0.31billion revenue loss, risking 336,200 jobs and $1.5 billion in contribution to Tanzania’s economy.
Mauritius is projected to see 3.5 million fewer passengers resulting in a $0.54 billion revenue loss, risking 73,700 jobs and $2 billion in contribution to Mauritius’ economy; Mozambique
1.4 million fewer passengers resulting in a $0.13 billion revenue loss, risking 126,400 jobs and $0.2 billion in contribution to Mozambique’s economy.
Ghana, according to IATA will record 2.8 million fewer passengers resulting in a $0.38 billion revenue loss, risking 284,300 jobs and $1.6 billion in contribution to Ghana’s economy; Senegal
2.6 million fewer passengers resulting in a $0.33 billion revenue loss, risking 156,200 jobs and $0.64 billion in contribution to Senegal’s economy and Cape Verde will see 2.2 million fewer passengers resulting in a $0.2 billion revenue loss, risking 46,700 jobs and $0.48 billion in contribution to Nigeria’s economy.
To rescue the aviation and transport sector, IATA lauded the efforts o Senegal for announcing $128 million in relief for the tourism and air transport sector, while Seychelles has waived all landing and parking fees for April to December 2020.
Cote d’Ivoire on the other hand has waived its Tourism Tax for transit passengers. As part of its economic support intervention, South Africa is deferring payroll, income and carbon taxes across all industries, which will also benefit airlines domiciled in that country.
It however called for more help, just as it called for direct financial support, loans, loan guarantees and support for the corporate bond market and tax relief
IATA has also appealed to development banks and other sources of finance to support Africa’s air transport sectors which are now on the verge of collapse.
“Airlines in Africa are struggling for survival. Air Mauritius has entered voluntary administration, South African Airways and SA Express are in business rescue, other distressed carriers have placed staff on unpaid leave or signaled their intention to cut jobs. More airlines will follow if urgent financial relief is not provided”.
“The economic damage of a crippled industry extends far beyond the sector itself. Aviation in Africa supports 6.2 million jobs and $56 billion in GDP. Sector failure is not an option, more governments need to step up,” said Muhammad Al Bakri, IATA’s Regional Vice President for Africa and the Middle East.
To minimize the impact on jobs and the broader African economy, the group emphasized that it is vital that governments step up their efforts to aid the industry.
The clearing house for global airlines said this becomes necessary in view of the fact that 3.1 million jobs in African aviation and related sectors that are at risk (up from previous estimate of 2 million), disclosing that this is half of all aviation and related sector jobs on the continent.
It also projected that African airlines will lose $6 billion in revenues in 2020 vs 2019 (up from the previous estimate of $4 billion), while the lack of connectivity and demand for air transport will result in a $28 billion reduction in Africa’s Gross Domestic Product (GDP) (previous estimate was $17.8 billion).