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IATA’S Two Way Strategy on African Aviation

by Radhakrishnan Pattabiraman

The International Air Transport Association (IATA) has warned with a sharp decline in the growth of Aviation Industry growth in the African Market as compared to its previous analysis in April 2020 including:

  • more than 50% of Job losses, up to 3.5 million out of a total of 6.2 million aviation and related industries – up by a  whopping 59% from previous estimates in April 2020 which was pegged at 2.2million.
  • Traffic for the Full-year in 2020 is expected to nosedive by 54% as compared to 2019 actuals which were at 80 million passenger journeys. The estimate in April 2020 on this front was 51%.
  • A concern of an 8% increase in the forecast by IATA on fall in GDP support by aviation from $28 billion to $35 billion.

A collection of South African Airlines aircraft parked on the tarmac at Johannesburg | © Flickr Commons

What is IATA’s Stance on the Situation?

In a press release by IATA, Muhammad Al Bakri – Regional Vice president for Africa & the Middle East has said that:

“COVID-19 has devastated African economies and brought air connectivity across the continent to a virtual standstill. And the situation is getting worse”.

The economic consequences resulting from a disconnected continent are severe. Millions of jobs and livelihoods are at risk in family-run enterprises and large corporations along with the entire travel and tourism value chain. For Africa’s economic recovery and future prosperity, it is essential to expedite the safe restart of the industry,”

IATA Economics’ latest outlook for key national markets in Africa has worsened since the previous assessment in June. For example, passenger numbers, jobs at risk and GDP impacts for the five biggest African markets have declined across every metric:

COUNTRY JUNE PAX ESTIMATE (MILLIONS) AUGUST PAX ESTIMATE (MILLIONS) JUNE JOBS AT RISK AUGUST JOBS AT RISK APRIL GDP
(US$ BILLIONS)
AUGUST GDP
(US$ BILLIONS)
South Africa -15.6 -16.6 269,000 287,700 -5.1 -5.8
Nigeria -5.3 -5.7 139,500 149,400 -0.9 -1.1
Kenya -3.8 -4.0 207,800 223,600 -1.6 -1.8
Rwanda -0.47 -0.5 17,300 18,500 -0.06 -0.07
Ethiopia -2.6 -2.8 530,400 564,100 -1.9 -2.1

To help tackle the situation, IATA has setup a two-way strategy to restart aviation and the local economy within the region.

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IATA’s two pronged strategy will hopefully allow the African Aviation sector to bounce back stronger and more resilient | © FutureTravelExperience

IATA’s Two Way Strategy

To begin with, it says an accelerated restart of African Aviation & the economy is both vital & key.

The report suggests a 2-way strategy of minimising the job impact and working with concerned African governments in reviving both the aviation industry and the economy.

  1. Harmonious Work within the Aviation Industry

Adopting the International Civil Aviation Organization (ICAO) Council’s Aviation Recovery Task Force (CART), Take-off guidance – for the safe restart of aviation – is critical for the resumption of air transport.  Rwanda is the first country to have fully complied with ICAO’s biosafety security recommendations.  This needs to be done by other African countries which will greatly improve the current situation to bounce back to normalcy and removal of unnecessary border constraints like quarantines, which deter passengers from travelling and thereby affect air travel will help faster recovery.

  1. African governments  to step up support to the industry

Governments should continuously look into financial and debt relief measures by way of cash inflows, extended credit limits and delayed load payments, reduction in interest rates,  flexible repayment schemes on loans, an extension of lease renewals, support to specific loan programs etc. will greatly reduce the debt burden for airlines and will revive economy faster.  Governments may look are various encouraging initiatives of looking at fuel prices reduction by reduction in fuel taxes & surcharge, Airport parking fee and other fees relating to operational costs so that it helps win airlines confidence to fly to those destinations and airlines will be more influenced to avail these benefits.

It is hoped with this two pronged approach, the aviation industry in African can bounce back stronger and more resilient than ever. What are your thoughts – let us know below in the comments

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Ram Harshvardhan
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Ram Harshvardhan

Very informative article, thank you. The data table and those bullet points help in easier reading.

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