Coronavirus makes African Airlines bleed $400 million

Due to the outbreak of the deadly coronavirus, several African airlines such as South African Airways, Royal Air Maroc, Air Tanzania, Air Mauritius, EgyptAir, RwandAir and Kenya Airways have suspended flights to and from China. Thus, the spread of the virus around the world means African airlines will soon find it hard to operate and resort to letting go hundreds of staff in a bid to stay afloat.

Vice-President of the International Air Transport Association (IATA), Raphael Kuuchi, says that the losses in the continent’s aviation industry has so far come from suspended and cancelled flights on routes to China.

“The preliminary estimates that IATA came up with indicates that African airlines risk losing about $400m on conservative estimates. This is just based on the impact of China,” Kuuchi told BBC Africa.

Last year, African airlines posted losses of up to $100m (£78m), and Kuuchi adds that the impact of the coronavirus is bound make matters worse for African airlines. IATA estimates that, in total, airlines could lose revenue worth $30 billion this year due to the viral outbreak.

Although the African airlines mentioned above have suspended flights to and from China, Ethiopian Airlines still operates flights from Addis to the Chinese cities of Chengdu, Guangzhou, Beijing, and Shanghai.

READ MORE: Ethiopian Airlines is Africa’s Best for the 3rd Year

Coronavirus and Airlines around the Globe

Meanwhile, because of how much commercial air travel is suffering globally, IATA is contacting aviation regulators worldwide, requesting that the rules governing use of airport slots be suspended immediately—a request that would extend through to the remainder of the 2020 season. These rules state that airlines must operate a minimum of 80% of their allocated slots under normal circumstances.

Under normal circumstances, failure to comply with this policy results in the airline losing its right to the slot come the next equivalent season. However, IATA policies state that, in the case of exceptional circumstances, regulators can relax the requirement.

Furthermore, to demonstrate how abnormal the circumstances caused by the coronavirus outbreak have been, IATA has released some information:

• An unidentified carrier experienced a 26% reduction across their entire operation in comparison to 2019 operations
• Another unidentified hub carrier reports bookings to Italy are down 108% as bookings collapse to zero and refunds grow
• Many carriers reporting 50% no-shows across several markets
• Future bookings are softening and carriers are reacting with measures such as crew being given unpaid leave, freezing of pay increases, and plans for aircraft to be grounded.