Mayday calls as African airline tanks run empty
A report from the African Airways Affiliation and the United Nations Financial Fee for Africa says many African airways are vulnerable to shutting down as a consequence of a money crunch brought on by the COVID-19 pandemic which has deepened their indebtedness to banks, plane rental corporations and producers and left them operating. in survival mode.
The report, launched on March 9, titled “Coverage Analysis Paper, COVID-19 and African Airways Overcome Liquidity Disaster.” He mentioned airways are anticipated to lose greater than $ 5.5 billion in income and cut back their general contribution to GDP by greater than $ 25.5 billion.
No less than 3.1 million aviation jobs had been misplaced between 2020 and 2021 on the continent. The report discovered that the worst affected nations are South Africa, Nigeria and Kenya.
“Airways have grounded their planes, inflicting a liquidity disaster with implications for debt reimbursement, leases and employees compensation. This has additionally impacted passenger reimbursements for canceled flights and the plane upkeep, amongst different monetary necessities, ”the report says.
Journey restrictions imposed around the globe since final 12 months haven’t been totally relaxed, and lots of airways are in dire monetary straits and can’t get well on their very own, he mentioned.
The African Airways Affiliation claims that air transport on the continent helps 7 million jobs, with a contribution of $ 64 billion to the African financial system. Earlier than COVID-19, Africa had an estimated 76.6 million air vacationers per 12 months, with the quantity anticipated to achieve 303 million by 2035.
In April final 12 months, flight departures to Africa had been estimated to be round 95% decrease, in comparison with a world drop of 78%.
Liquidity that’s quickly eroding
“The speedy erosion of airline liquidity threatens their very existence. It exposes them to a danger of insolvency, which underlines the necessity for pressing monetary help to beat the disaster, specifically direct injections of liquidity. Such help is critical to make sure that airways can restart. operations as nations steadily reopen their economies and borders, ”the affiliation mentioned within the report.
Abderahmane Berthe, secretary normal of the African Airways Affiliation, mentioned the affiliation continued to advocate for direct authorities help for airways and for them to create a platform to coordinate their efforts for the survival of the trade, specifically by linking airways and monetary establishments and facilitating entry to accessible funds.
“Monetary help for the trade is crucial to its survival. A few of the actions we’re asking governments to implement embody offering grants, loans and mortgage ensures, issuing fairness, and deferring or canceling cost of money owed, rents, royalties. and airline taxes. . ”
The report goes additional by recommending methods and plans for the survival, restoration and sustainability of the trade on the continent. Emphasis has additionally been positioned on creating new enterprise alternatives for airways as economies open up.