As of March 11, airlines in Africa have lost around $4.4 billion in revenue due to the Covid-19 pandemic, according to the International Air Transport Association (IATA).
According to a report published by QZ Africa, flights between Africa and China have increased by around 630 percent in the last decade. Reportedly, Ethiopian Airlines alone carried about 1,500 passengers from China every day.
However, due to the Covid-19 epidemic in Wuhan, China, many airlines in the continent such as South African Airways, Royal Air Maroc, Air Tanzania, Air Mauritius, EgyptAir, RwandAir and Kenya Airways suspended flights to and from China. But since then the virus has spread throughout Southeast Asia, Europe, and even Africa.
Now, most of the countries including African nations have closed their borders and cancelled flights in and out of the country. Global air travel is also down by 94 percent.
IATA Africa Middle East Vice President Muhammad Ali Albakri warned that many African airlines’ cash reserves are drying up and the government must intervene to help them deal with the slowdown caused by the Covid-19 outbreak.
In a report, IATA further revealed that global carriers across the globe might need a bailout package of around $250 billion.
Brian Pearce, Chief Economist at IATA told the media, “Border closure and travel restrictions have resulted in passenger demand falling to zero for many airlines. We had earlier estimated losses for airlines globally to be at $113 billion and we are already beyond that.”
He further revealed that many carriers are running out of cash and that 75 percent of them have less than 3 months of non-avoidable fixed costs. The current liquidity crisis for the carriers is driven by fixed obligations such as debt servicing and short-term liabilities.