IATA estimates $23 billion revenue loss for African & Middle Eastern airlines

The International Air Transport Association (IATA) has called on governments to provide “urgent action” to safeguard African & Middle Eastern carriers.

Jordan is expected to suffer 2.8 million fewer passengers incurring a USD0.5 billion loss with potentially 26,400 job losses. Photo by Andrew Pries | AeroNewsX

IATA called on governments to provide financial relief to airlines, as it estimates a total revenue loss for African and Middle Eastern airlines to total approximately $23 billion (US$19 billion in the Middle East and US$4 billion in Africa).

Airlines across the globe are struggling from the coronavirus outbreak. Demand has plummeted and some airlines have grounded entire fleets.

Kenya Airways has suspended all international flights and, as reported yesterday, has appealed to the government for financial aid. IATA estimates the industry in Kenya will suffer 2.5 million fewer passengers which will result in a USD0.54 billion revenue loss. This would in turn put 137,965 jobs at risk, hitting Kenya’s economy by about USD1.1 billion.

Muhammad Al Bakri, IATA’s Regional Vice President for Africa and the Middle East 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. Every job created in the aviation industry supports another 24 jobs in the wider economy. Governments must recognize 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. 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.”

IATA estimates that Saudi Arabia will be the worst hit. It says it expects “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.”

IATA called on governments to provide direct financial aid, loans/loan guarantees and support for the corporate bond market as well as tax relief to ease financial pressure on the respective airlines.

The aviation industry is facing unprecedented times. The coronavirus pandemic has had a significant hit on airlines and is expected to have long term implications for the industry as a whole.