IATA calls on states, financiers to Aid Africa’s airlines

The International Air Transport Association (IATA) has again called for governments to finance the industry, which risks total collapse as the impact of the Covid-19 crisis deepens.

According to the global aviation trade association, African countries, including Kenya, Ethiopia, South Africa, Nigeria and Tanzania, will be hit hardest, as the airlines have lost revenues running into billions of shillings, due to severe travel restrictions.

The association is now calling for aid through a number of ways which include direct financial support, loans, loan guarantees, support for the corporate bond market and tax relief.

“To minimize the impact on jobs and the broader African economy it is vital that governments step up their efforts to aid the industry,” IATA said.

IATA is also appealing to development banks and other sources of finance to support Africa’s air transport sectors.

The aviation body has warned that the economic damage of a crippled aviation industry extends far beyond the sector itself.

“Aviation in Africa supports 6.2 million jobs and $56 billion (Sh5.88 trillion) in GDP. Sector failure is not an option, more governments need to step up,” said Muhammad Al Bakri, IATA’s regional vice-president for Africa and the Middle East.

Already, Kenya has lost Sh56.7 billion and has about 137,965 jobs affected as of April 2, noted the association.

Should the Kenya aviation industry remain unattended, it is expected the country will lose Sh76.65 billion in revenue while risking 193,300 jobs at the national carrier Kenya Airways (KQ) and Jomo Kenyatta International Airport (JKIA).

This is from the expected loss of Sh168 billion in contribution to the economy and 3.5 million passengers, representing a 50 percent reduction in passenger demand.

Earlier, KQ sought a government bailout after grounding its aircraft due to the ban on international flights, signaling a cut in revenue.