The trade growth between Africa and Asia was noticeably slower, from 18.5% in April to 11% in May. However, capacity increased 9.2% over the previous year in May.

“Trading conditions for air cargo continue to be challenging with a 5.2% fall in demand and several economic indicators pointing towards weakness,” said IATA Director General Willie Walsh, Zawya reported.

“The second half of the year, however, should bring some improvements. As inflation moderates in many markets, it is widely expected that central bank rate hikes will taper. This should help stimulate economic activity with a positive impact on demand for air cargo,” he stated.

Global demand in May 2023 fell by 5.2% y-o-y, while capacity increased by 14.5% y-o-y, mainly due to belly capacity, which is increasing as passenger demand recovers.

According to IATA, capacity is currently 5.9% above May 2019 (pre-pandemic) levels.

Meanwhile, South African Airways (SAA) has confirmed the forthcoming launch of two new intercontinental routes to Sao Paulo, Brazil.

The transatlantic route is the first of its kind since South Africa’s flagship airline resumed normal operations in September 2021.

South African Airways interim executive chairman and chief executive officer John Lamola said he was pleased to announce Sao Paulo as the first international destination as the airline successfully weathered the crisis it found itself in during COVID-19.

“Our decision to resume long-haul service to Sao Paulo was made on the basis of a thorough analysis of the feasibility of this route,” he explained, TV Brics reported.

According to the company, South African Airways will fly to Sao Paulo Guarulhos International Airport four times a week, twice from Cape Town (on Tuesdays and Saturdays) and twice from Johannesburg (on Mondays and Thursdays).

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The announcement was made at the 79th IATA Annual General Meeting (AGM) and World Air Transport Summit, held in Istanbul. The event also marked Riyadh Air’s first public appearance since its launch. Tony Douglas, CEO, and an official delegation from the airline were in attendance.

By 2030, Riyadh Air’s primary hub and operations will be connecting the capital of the Kingdom to more than 100 locations worldwide. Riyadh Air will be a full-service, digitally native airline leading the way in new technology and innovations while providing customers with genuine, cordial Saudi hospitality.

Riyadh Air has been developed to assist Saudi Arabia’s ‘National Aviation Strategy’ and the more extensive ‘National Transport and Logistics Strategy’, which strive to fulfil the Kingdom’s ‘Vision 2030’ goals, with operations set to begin in early 2025.

By connecting the three continents of Asia, Africa, and Europe, Riyadh Air will use the Kingdom’s strategic location, promote economic growth and diversification, and provide more than 200,000 direct and indirect job possibilities.

Riyadh Air CEO Tony Douglas said, “It has been an absolute pleasure to be on the ground at the IATA AGM.”

The Riyadh Air team has had the opportunity to meet with experts and industry stakeholders to discuss safe, effective, and technologically cutting-edge themes in the international aviation business.

“We are happy to announce that we have secured “RX” as our IATA code, displayed on every touchpoint our guests see while they fly with us. The code expresses our desire to be a digitally-led airline that connects cutting-edge technology and innovation,” the official stated further.

“We are thrilled for our customers to be able to fly to more than 100 destinations with our code on their luggage tags, booking paperwork, and digital services, thanks to Riyadh Air’s achievement of another significant milestone in the direction of its operations in 2025. The travel business and the commercial organization of passenger and freight air transportation are essential components of IATA codes,” he remarked.

“They are crucial for identifying an airline, making international reservations, and helping ground service workers at airports in their work. Since the airline’s March 2023 launch, over 300,000 job applications from people in 182 countries have been submitted through the airline’s careers website,” Tony Douglas concluded.

Photo Credits: Riyadh Air

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The numbers show a decrease of 19.8 percent compared to the previous year. Dubai Airports CEO Paul Griffiths, said in a statement, “The Covid-19 pandemic is of a very different nature than any previous crisis in that it has affected supply, demand and health security and by extension, the entire global economy. We’re dealing with a monster here for which we clearly have to find a solution. Until there is a proven level of confidence medically that people can travel without fear of spreading or contracting the virus, the situation we find ourselves in is likely to continue.”

Recently, the UAE airlines Emirates and Etihad announced the resumption of flight cancellations to select destinations as countries are slowly easing their respective lockdowns. According to Brian Pearce, chief economist of the International Air Transport Association (IATA), “Critically, we need to see [first] a reduction in COVID-19 risks, the risk of countries importing COVID-19. And so, we either need to have a vaccine, reliable tests, or the widespread acceptance of layered measures that IATA and others are proposing [before we can see a recovery].”

IATA data pointed out that aviation and tourism account for 13 percent of the UAE’s GDP. It seems that aircraft movements dropped 18.7 percent year-on-year from 95,857 to 77,920 in the beginning of February, media reports said.

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Out of the 162 cancelled flights by South African Airways, 38 of them are international flights and 124 are domestic flights.

With regard to the cancelled flights, South African Airways said in a statement, “The effects of the outbreak of the coronavirus (Covid-19) have led to travel disruptions and restrictions across the world, leading to the grounding of aircraft, releasing employees, and cancelling flights for many airlines. SAA is not immune to these realities.”

Philip Saunders, chief executive at South African Airways revealed that the carrier is continuously reviewing its schedule to meet capacity with demand to the extent possible.

The global aviation industry has taken a severe hit due to the Covid-19 outbreak with the International Air Transport Association (IATA) claiming the industry could lose around $113 billion in revenue.

But amid this, the reduction in international flights has deflated the price of leasing jets which is giving South African Airways an upper hand in negotiation, according to Siviwe Dongwana, one of two administrators hired by the government to draw up a turnaround plan.

IATA also reported that the outbreak of the Covid-19 or the coronavirus could see African airlines lose around $40 million in revenue this year. However, the number could rise significantly as the Covid-19 virus has now spread to Europe as well as Africa.

In a fresh report, IATA also revealed that carriers across the globe might need a bailout package of around $250 billion. The report further warned that some carriers might go bankrupt as they lack sufficient cash to survive for more than three months.

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With global air travel down by 94 percent, carriers across the globe might need a bailout package of around $250 billion, IATA added.

“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,” said Brian Pearce, Chief Economist at IATA.

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.

The slump in oil prices did provide some relief for carriers but it is not enough to help the airline deal with the cancellation of services due to the Covid-19 pandemic, which originated in the Chinese city of Wuhan.

Director-General and CEO, IATA, Alexander de Juniac revealed that at the start of the year, 75 percent of the world’s carriers had cash enough only for three months and their stocks are running dry at a high speed due the coronavirus outbreak.

Boeing, one of the largest aircraft manufacturers in the world, recently called for $60 billion in assistance for aerospace manufacturers to help deal with the losses.

Earlier this month, IATA revealed that carriers globally are set to lose in passenger revenues of up to $113 billion, if the Coronavirus spreads further.

Earlier this month, UK-based carrier Flybe has gone into administration after a bid for fresh financial support failed. Reportedly, the impact of the coronavirus outbreak on demand for air travel was partly to blame for its collapse.

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IATA Pay is an industry-wide initiative to develop a new payment option for consumers purchasing a ticket directly from an airlinewebsite. It provides a simple, instantaneous and highly secure transaction for both airline and customer. It can host applications and create new solutions for customers using Open Banking APIs, within the UK regulations.

The live test conducted withIpagoo was completed in collaboration with IATA Pay pilot airlines Cathay Pacific Airways, Scandinavian Airlines and Emirates.

For airlines, the advantages of IATA Pay are:

• Reduction of card fraud and the cost of managing fraud costs
• Reduction of card fees
• Improvement of conversions to sale on airline website (due to an improved payment experience)
• Reduction of ownership of data and its associated costs and risks
• Faster cashflow with instant/near instant payment to the merchant

Carlos Sanchez, CEO, ipagoo said: “We are delighted to have completed the first Open Banking live transaction for the airline industry, helping IATA and its member airlines to achieve their goals of operational and financial efficiency. ipagoo’s technology provides a secure, multi-country payment service for IATA. We are at the forefront of development and innovation within the financial industry and committed to helping businesses and their clients take advantage of the opportunities provided by Open Banking.”

Juan Iván Martín, IATA’s Head of Innovation, Financial and Distribution Services, said: “IATA is creating an Open Innovation Ecosystem to accelerate change in the industry. Doing this requires  engaging with partners who can deliver significant value to our industry with speed. Working with ipagoo has been a great example of what’s possible. Together, we put together a proof-of-concept in a month to enable our industry to benefit from new payment capabilities”

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The boost in economic and network expansion has helped India to be a pioneer in the sector.

Last week in a report IATA said: “The domestic India market posted the fastest full-year growth rate for the third year in a row (17.5 percent), followed by China (13.3 percent).”

Revenue Passenger Kilometres (RPKs) that is a parameter to evaluate passenger volumes, showed a global climb of 7.6 percent in 2017. This has marked ‘above-trend growth’ that has surpassed the ten- year average rate of 5.5 percent.

Although India leads the position, the RPKs parameter shows that the growth in the sector is an outcome of economic expansion all across the globe.

“India posted the fastest domestic RPK growth for the third year in a row, driven by economic and network expansion,” the report said.

December recorded the highest growth rate of 17.4 percent in India.

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