COVID-19: IATA projects US$23bn revenue loss by airlines in Africa, Middle East

Middle East

The International Air Transport Association (IATA), on Thursday, projected a potential revenue loss by airlines in Africa and the Middle East to have reached US$23 billion (N8.74 trillion) due to the Coronavirus pandemic ravaging the world.

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Mr Muhammad Al-Bakri, the IATA’s Regional Vice President for Africa and the Middle East, made the disclosure in a statement issued in Lagos.

Al-Bakri said about US$19 billion (N7.22 trillion) and US$4 billion (N1.52 trillion) had so far been lost by the airlines operating in the Middle East and Africa, respectively.

According to him, this translates into a drop in industry revenues by 32 percent for Africa and 39 percent for the Middle East for 2020 compared with those of 2019.

He, therefore, called for urgent action from governments in Africa and the Middle East to provide financial relief to the airlines.

Al-Bakri explained that some of the impacts at the national level included the Saudi Arabia, United Arab Emirates, Egypt, Qatar, Jordan, South Africa, Nigeria, Ethiopia and Kenya.

“In Saudi Arabia, it’s 26.7 million fewer passengers, resulting in a US$5.61billion revenue loss, risking 217,570 jobs and US$13.6 billion in contribution to Saudi Arabia’s economy.

“In UAE, it’s 23.8 million fewer passengers, resulting in a US$5.36 billion revenue loss, risking 287,863 jobs and US$17.7 billion in contribution to the UAE economy.

“In Egypt, 9.5 million, it’s fewer passengers, resulting in a US$1.6 billion revenue loss, risking almost 205,560 jobs and around US$2.4 billion in contribution to Egypt’s economy.

“In Qatar, it’s 3.6 million fewer passengers, resulting in a US$1.32 billion revenue loss, risking 53,640 jobs and US$2.1billion in contribution to Qatar’s economy.

“In Jordan, it’s 2.8 million fewer passengers, resulting in a US$0.5 billion revenue loss, risking 26,400 jobs and US$0.8 billion in contribution to Jordan’s economy.

“In South Africa, there were 10.7 million fewer passengers, resulting in a US$2.29 billion revenue loss, risking 186,850 jobs and US$3.8 billion in contribution to South Africa’s economy.

“In Nigeria, it’s 3.5 million fewer passengers, resulting in a US$ 0.76 billion revenue loss, risking 91,380 jobs and US$0.65 billion in contribution to Nigeria’s economy.

“The same thing in Ethiopia, with 1.6 million fewer passengers, resulting in a US$0.3billion revenue loss, risking 327,062 jobs and US$1.2 billion in contribution to Ethiopia’s economy.

“In Kenya, it’s 2.5 million fewer passengers, resulting in a US$ 0.54 billion revenue loss, risking 137,965 jobs and US$1.1 billion in contribution to Kenya’s economy.

Al-Bakri said to minimise the broad damage that those losses would have across the African and Middle East economies, it was vital that governments stepped up their efforts to aid the industry.

He said that IATA was calling for a mixture of direct financial support, loans, loan guarantees and support for the corporate bond market tax relief.

The IATA chief said it was starting to see several governments in the region providing some financial and tax reliefs, including deferral of aircraft lease payments by the government of Cape Verde.

According to him, others are extension of VAT refund payment dates in Saudi Arabia and positive considerations for financial relief from governments across the region, including Jordan, Rwanda, Angola and the UAE.

Al-Bakri said the air transport industry was an economic engine, supporting up to 8.6 million jobs across Africa and the Middle East, with $186 billion in GDP.

The IATA chief said every job created in the aviation industry supported another 24 jobs in the wider economy.

“Governments must recognise the vital importance of air transport industry and that support is urgently needed.

“Airlines are fighting for survival in every corner of the world. Travel restrictions and evaporating demand mean that aside from cargo, there is almost no passenger business.

“Therefore, failure by governments to act now will make this crisis longer and more painful, as airlines have demonstrated their value in economic and social development, and governments need to prioritise them in rescue packages.

“This is because healthy airlines will be able to jump-start the Middle East and global economies post-crisis,” he said.

Aside the financial support, Al Bakri also called for aviation regulators to support the industry, saying that this must be key priorities in Africa and the Middle East.

He said that government should provide a package of measures to ensure air cargo operations, including fast track procedures to obtain over-flight and landing permits.

The IATA regional vice president also called for exemption of flight crew members from 14-day quarantine and removal of economic impediments (over-flight charges, parking fees, and slot restrictions).

Al-Bakri also called on governments across the two regions to provide financial reliefs for Airport and Air Traffic Control (ATC) Charges and Taxes.

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