Business

South African airlines face a R42 billion loss due to the coronavirus

Staff Writer

 ·3 Apr 2020

The International Air Transport Association (IATA) has warned that South Africa’s airlines will need urgent support from government due to the revenue loss caused by the coronavirus.

The group has forecast that local airlines will carry 10.7 million fewer passengers due to the pandemic and subsequent travel restrictions, resulting in a $2.29 billion (R42.5 billion) revenue loss.

This pandemic will also put 186,850 jobs and $3.8 billion (R70 billion) in contribution to South Africa’s economy at risk, the group said.

“The air transport industry is an economic engine, supporting up to 8.6 million jobs across Africa and the Middle East and $186 billion in GDP,” said Muhammad Al Bakri, IATA’s regional vice president for Africa and the Middle East.

“Governments must recognise the vital importance of the air transport industry, and that support is urgently needed. Airlines are fighting for survival in every corner of the world,” he aid.

Al Bakri noted that travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business.

“Failure by Governments to act now will make this crisis longer and more painful. Airlines have demonstrated their value in economic and social development in Africa and the Middle East and governments need to prioritize them in rescue packages.

“Healthy airlines will be essential to jump-start the Middle East and global economies post-crisis,” he said.

In addition to financial support, IATA called for regulators to support the industry. It said that key priorities should include:

• Providing a package of measures to ensure air cargo operations, including fast track procedures to obtain overflight and landing permits, exempting flight crew members from 14-day quarantine, and removing economic impediments (overflight charges, parking fees, and slot restrictions);
• Providing financial relief on Airport and Air Traffic Control (ATC) charges and taxes;
• Ensuring aeronautical information is published, timely, accurately, and without ambiguity, ensuring the airlines can plan and execute their flights.

“Some regulators are taking positive action. We are grateful to the Ghana, Morocco, the UAE, Saudi Arabic and South Africa for agreeing a full-season waiver to the slot use rule.

“This will enable airlines and airports greater flexibility for this season and greater certainty for summer. But there is more to do on the regulatory front. Governments need to recognize that we are in a crisis,” said Al Bakri.

Read: Global cost of coronavirus could reach $4.1 trillion, or almost 5% of global GDP