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IATA sees bleak future for Africa’s airlines, 4 out of operations, many in financial distress

By on October 22, 2020 0 116 Views

By GFDNews Correpondent

The International Air Transport Association (IATA) has predicted a bleak future for the aviation industry in Africa as it claimed that four airlines across the continent have ceased operations, two are in voluntary administration while many are in serious financial distress.

According to a report by the IATA, “Without urgent financial relief more carriers and their employees are at risk, as is the wider African air transport industry, which supports 7.7 million jobs on the continent.”

“Hundreds of thousands of airline jobs are at risk if there is a systemic failure in African aviation. And this is not just in aviation but across industries that depend on efficient global connectivity.

“Much needed financial relief has been pledged, but little has materialized. The situation is critical. Governments and donor organizations need to act fast or the challenge will move from supporting an industry in severe distress to resurrection from bankruptcy,” said Muhammad Albakri, IATA’s Regional Vice President for Africa and the Middle East.

The governments of Rwanda, Senegal, Côte D’Ivoire and Burkina Faso have pledged a total of USD 311 million in direct financial support to air transport. A further USD 30 billion has been promised by some governments, international finance bodies and other institutions including the African Development Bank, African Export Import Bank, African Union and the International Monetary Fund (IMF) for air transport and tourism.
However, most of this relief is yet reach those in need.

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IATA downgraded its traffic forecast for the continent for 2020 to reflect a weaker-than-expected recovery, noting that full-year 2020 passenger numbers in Africa to reach only 30 percent of 2019 levels, down significantly from the 45 percent that was projected in July

The group said the region is expected to see around 45 million travelers in 2020 compared to 155 million in 2019

In 2021, demand is expected to strengthen to 45 percent of 2019 levels to reach close to 70 million travelers to/from/within the region. “A full return to 2019 levels is not expected until late 2023,” IATA stated

It said that forward bookings for air travel in the fourth quarter show that the recovery continues to falter. While domestic travel is picking up across Africa as countries re-open their borders, international travel remains heavily constrained as major markets including the EU remain closed to citizens of African nations. Currently, residents from only two African countries– Rwanda and Tunisia – are permitted to enter EU borders.

“The further fall in passenger traffic in 2020 is more bad news for the aviation industry in Africa. A few months ago, we thought that demand reaching 45% across the continent in 2020 compared to 2019 was as grim as it could get. But with international travel remaining virtually non-existent and a slower than expected pick up in domestic travel, we have revised our expectations downward to 30%,” Albakri said.

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