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African airlines brace for another year of losses

By EDITH MUTETHYA in Nairobi, Kenya | China Daily | Updated: 2020-11-26 07:47

A passenger walks past empty check-in counters at Cape Town International Airport, run by state-controlled airports company ACSA, during the coronavirus disease (COVID-19) outbreak in Cape Town, South Africa, July 7, 2020. [Photo/Agencies]

Africa's airline sector is expected to keep logging deep industry losses into 2021, as the global industry has taken a historic hit from the coronavirus while pinning its hopes on the release of an effective vaccine.

"The COVID-19 crisis threatens the survival of the air transport industry," with 2020 likely to be its worst year ever, the International Air Transport Association, or IATA, said on Tuesday.

Airline revenues will plunge by 60 percent this year as a result of the pandemic, it said while holding its annual congress.

Globally, this year's revenues are now expected at around $328 billion, the IATA said, and the industry will likely chalk up net losses of $118.5 billion, far worse than its forecast in June for losses of $84.3 billion.

In 2019, the sector reported revenues of $838 billion.

"This crisis is devastating and implacable," IATA Director-General Alexandre de Juniac said.

The IATA has pressed governments for months to introduce virus testing before departure to do away with the need for up to 14-day quarantine periods on arrival. It said the change would allow airlines to get back to business without compromising safety.

For Africa, the IATA said the airline industry is forecast to record $2 billion in net losses for 2020 and $1.7 billion in net losses for 2021.

Turning point

The IATA said while the availability of a vaccine in the second half of 2021 could be a turning point, the relative lack of cold chain facilities in Africa may delay their distribution and the continent is expected to experience a delayed recovery in its financial performance.

In an interview with Air Transport World magazine on Monday, Abderahmane Berthe, secretary-general of the African Airlines Association, said the key challenge for African airlines is a liquidity crunch to restart business. He said his agency has been urging governments to support airlines and for financial institutions to put in place funds to support them.

Agencies contributed to this story.

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