Five international air transport and tourism bodies on Wednesday launched an appeal to international financial institutions and donors to support Africa’s travel and tourism sector, which employs 24.6 million people.
The sector contributes 169 billion dollars to Africa’s economy combined.
The request was made by the International Air Transport Association (IATA), the UN World Tourism Organisation (UNWTO), the African Airlines Association (AFRAA) and the Airlines Association of Southern Africa (AASA).
They have asked the international institutions for 10 billion dollars in relief to support the Travel & Tourism industry.
“There is an urgent appeal by IATA and the international community and the World Tourism Organisation saying we need financial help for the travel and tourism sector in Africa and we need this as grant type of financing or government subsidies or it can also be through providing loan repayments or providing guarantees, ” says Aviation Expert, Lindeen Burns.
In the transport sector, aviation companies are facing financial challenges after operations have been brought to a halt by lockdown regulations which are aimed to curb the spread of coronavirus.
In South Africa, aviation company, Comair, which owns Kulula.com has entered into business rescue to safeguard the interest of the company. The company says it could not implement its turnaround strategy because of COVID-19 crisis.
The company reported a half-year loss of R564 million, following the COVID-19 lockdown. Experts warn of a job blood bath across the broader economy and value chains if the government does not intervene.
In the video below, CEO of the Airlines Association of Southern Africa (AASA) says the aviation industry is a dire situation:
Meanwhile, SA Express staff are yet to be paid their March salaries and its Business Rescue Practitioners filed for liquidation this month. Aviation experts anticipate a job bloodbath in the sector this year.
“The international Air Transport IATA has looked at the outlook of the industry in the impact of the COVID-19 travel restrictions. There estimates is that there will be 14.5 million fewer passenger’s traveling in South Africa alone and that represents about three billion dollars or around ix billion Rand in lost revenue. It risks about 252 thousand jobs directly in the air transport industry in this country. Each job in air transport and aviation supports 24. 25 jobs across the broader economy.”
Some experts say the sector urgently needs government support to prevent more companies from going under. Independent Transport Economist Dr Joachim Vermooten says, ” IATA indicated months ago no scheduled airline even though well capalised will be able to sustain the financial impact of the grounding orders applied to airlines. It really required government to come to the party and provide financial assistance otherwise the impact will be greatly felt in the country.”
Some African governments are trying to provide targeted and temporary support for hard-hit sectors such as Travel & Tourism. However, many countries lack the necessary resources to help the industry and these livelihoods through this crisis.
The South African government expects local aviation to resume this year while international travel is expected to start next year. The industry disagrees and says they would be able to take precautionary measures to resume all flights.
The graphic below shows transport regulations during South Africa’s Level-4 lockdown :