African Airlines Down $4.4B Due To Coronavirus

Rwanda Air, and Air Mauritius are among airlines that have suspended flights to China. Morocco has suspended all international flights to and from its territory “until further notice” and Kenya Airways also suspended flights to countries affected by the virus.

According to a report from the International Air Transport Association (IATA), as of March 11, African airlines have recorded a loss of up to $4.4 billion in revenue since the virus surfaced.

Adefunke Adeyemi, IATA’s Regional Director for Advocacy and Strategic relations in Africa says passenger demand for Africa has reduced significantly. International bookings in Africa went down by 20% in March and April, while domestic bookings have fallen by about 15% in March and 25% in April, according to data from IATA.

“Not as many passengers are traveling to, from and within Africa because of the outbreak. In terms of the impact on the aviation industry, the numbers we released show Africa taking a hit in terms of revenue,” Adeyemi said.

Disruptions from the virus can result in a 6 million passenger loss for airlines in South Africa flying out of the country according to recent data from IATA.

On Wednesday, the country’s national carrier, South Africa Airways (SAA) announced that it had already canceled up to 162 international and regional flights until the end of March due to restrictions and low demand following the spread of coronavirus.

SAA is under a form of bankruptcy protection and currently battling for its survival.

As of March 18, Kenya had three confirmed cases of coronavirus but IATA predicts that if the virus gains a spread of more than 10 in the country, it is likely to face a loss of 622,000 in passenger volumes.

Kenya has already introduced travel bans to curtail the possibility of the virus spreading further, suspending travel from any country with reported coronavirus cases.

Nigeria and Rwanda are also faced with a loss of 853,000 and 79,000 in passenger volume respectively, according to IATA.

One of the reasons Africa’s aviation industry is hit hard by the spread of the virus is its large trade and travel relations with China, where the outbreak started, says Tokunbo Afikuyomi, an economic analyst based in Nigeria.
According to a report by QZ Africa, Air flight between China and Africa has increased by 630% in the last decade, with airlines like Ethiopia air flying in about 1,500 passengers from China every day.

Over the past 20 years, China and Africa have become close trade partners with China expanding its economic and political ties on the continent.
As a result, Chinese citizens have flocked Africa, working in industries including manufacturing, healthcare, and technology. And according to Migration Policy, there are currently about 2 million Chinese in Africa.

“China is Africa’s main foreign business partner. A range of businesses and people come to Africa from China and we have many flights to the continent every day,” Afikuyomi said.

“The suspension of some of these flights will definitely affect the revenue of airlines as we are already seeing with some international airlines.”
Outside Africa, airlines like German-owned Lufthansa have already cut their operations by half due to drastic declines in bookings following the outbreak of coronavirus.

The UK based airline Flybe also collapsed March 5 as a decrease in flight demand because of the virus dealt a final blow to the already struggling carrier.

Afikuyomi says the likelihood of this happening to African airlines, especially airlines like South Africa Airways already facing bankruptcy challenges to stay afloat is high.

“They (Flybe) went out of business because they had issues before coronavirus, the pandemic came in and made things significantly worse. Similarly, in Africa, we have a few airlines who already had past issues.
South African Airways went through bankruptcy in December. The virus situation is going to put a strain on all African Airlines, particularly the ones with past struggles,” he said.