Coronavirus: African airlines lose $4.4bn in revenue

Multiple flights have been canceled or temporarily suspended across Africa as airlines struggle to cope with falling demand following the spread of coronavirus.

Rwanda Air and Air Mauritius are among airlines that have suspended flights to China. Morocco has suspended all international flights to and from its territory “until further notice” and Kenya Airways also suspended flights to countries affected by the virus.

According to a report from the International Air Transport Association (IATA), as of March 11, African airlines have recorded a loss of up to $4.4 billion in revenue since the virus surfaced.

Adefunke Adeyemi, IATA’s Regional Director for Advocacy and Strategic relations in Africa says passenger demand for Africa has reduced significantly.

International bookings in Africa went down by 20% in March and April, while domestic bookings have fallen by about 15% in March and 25% in April, according to data from IATA.

“Not as many passengers are traveling to, from and within Africa because of the outbreak. In terms of the impact on the aviation industry, the numbers we released show Africa taking a hit in terms of revenue,” Adeyemi told CNN.



Loss of passenger revenue

Disruptions from the virus can result in a 6 million passenger loss for airlines in South Africa flying out of the country according to recent data from IATA.

On Wednesday, the country’s national carrier, South Africa Airways (SAA) announced that it had already canceled up to 162 international and regional flights until the end of March due to restrictions and low demand following the spread of coronavirus.

SAA is under a form of bankruptcy protection and currently battling for its survival.

As of March 18, Kenya had three confirmed cases of coronavirus but IATA predicts that if the virus gains a spread of more than 10 in the country, it is likely to face a loss of 622,000 in passenger volumes.

Kenya has already introduced travel bans to curtail the possibility of the virus spreading further, suspending travel from any country with reported coronavirus cases.

Nigeria and Rwanda are also faced with a loss of 853,000 and 79,000 in passenger volume respectively, according to IATA.



Africa’s aviation industry

One of the reasons Africa’s aviation industry is hit hard by the spread of the virus is its large trade and travel relations with China, where the outbreak started, says Tokunbo Afikuyomi, an economic analyst based in Nigeria.

According to a report by QZ Africa, Air flight between China and Africa has increased by 630% in the last decade, with airlines like Ethiopia air flying in about 1,500 passengers from China every day.

ver the past 20 years, China and Africa have become close trade partners with China expanding its economic and political ties on the continent.

As a result, Chinese citizens have flocked Africa, working in industries including manufacturing, healthcare, and technology.

And according to Migration Policy, there are currently about 2 million Chinese in Africa.

“China is Africa’s main foreign business partner. A range of businesses and people come to Africa from China and we have many flights to the continent every day,” Afikuyomi said.

“The suspension of some of these flights will definitely affect the revenue of airlines as we are already seeing with some international airlines.

“Outside Africa, airlines like German-owned Lufthansa have already cut their operations by half due to drastic declines in bookings following the outbreak of coronavirus.

The UK based airline Flybe also collapsed March 5 as a decrease in flight demand because of the virus dealt a final blow to the already struggling carrier.

Afikuyomi says the likelihood of this happening to African airlines, especially airlines like South Africa Airways already facing bankruptcy challenges to stay afloat is high.

“They (Flybe) went out of business because they had issues before coronavirus, the pandemic came in and made things significantly worse. Similarly, in Africa, we have a few airlines who already had past issues.

“South African Airways went through bankruptcy in December. The virus situation is going to put a strain on all African Airlines, particularly the ones with past struggles,” he said.



Bailout for airlines

It is difficult to predict how long it will take to fully reduce the extent of the spread coronavirus, says Adeyemi.

“We don’t know how long it will take to curtail the spread of coronavirus. Previous crisis of similar nature in the past like Sars had a horizon of about 6 months but Covid is unprecedented and it is impossible to say how long it will last,” she said.

In order to minimize the impact of the virus on the aviation industry, IATA’s calls to action to governments of affected countries is to support airlines through loans and tax relief packages says Adeyemi.

In a statement released Thursday, IATA asked governments in Africa and the Middle East to consider providing emergency support to airlines fighting to survive as a result of the spread of coronavirus.

“Stopping the spread of COVID-19 is the top priority of governments. But they must be aware that the public health emergency has now become a catastrophe for economies and for aviation.

“The scale of the current industry crisis is much worse and far more widespread than 9.11, SARS or the 2008 Global Financial Crisis. Airlines are fighting for survival. Many routes have been suspended in Africa and Middle East and airlines have seen demand fall by as much as 60% on remaining ones.

“Millions of jobs are at stake. Airlines need urgent government action if they are to emerge from this in a fit state to help the world recover, once COVID-19 is beaten,” said Alexandre de Juniac, IATA’s Director General in the statement.

“From the government, our call to action is for the government to provide relief either through stimulus packages or through suspension of aeronautical charges, alleviation or reduction of some taxes. It is really important now because we can see the importance of connectivity,” Adeyemi said.