African airlines reshape to ease Corona pressures
The aviation industry in the continent is reeling under losses due to coronavirus related travel restrictions forcing airlines to re-strategise to stay afloat.
Harriet James @harriet86jim
International Air Transport Association (IATA) projects that the global air transport industry will make losses spanning into trillions of shillings due to the imposed travel restrictions by governments.
The industry is expected to lose Sh9.1 trillion in 2020 for a net profit margin of -20.1 per cent due to travel restrictions including airport and border closures, suspension of all incoming and outgoing flights, and nationwide lockdowns.
Additionally, revenues are expected to fall by 50 per cent to Sh45 trillion from Sh90.1 trillion in 2019.
In 2021, losses are expected to be cut to Sh1.7 trillion as revenues rise to sh 64.3 trillion
Speaking in a webinar dubbed Impact of Covid-19 on the EAC Aviation, various airline players talked about the measures they have implemented in order to stay afloat in business.
Most of the airlines have adapted to the cargo business with the rise in demand of the service during this period.
For instance, since the start of the outbreak, Ethiopian Airlines became the major airline supplying medical essentials into Africa.
Through a mobile app adapted for iOS and Android users, the airline also introduced an online cargo and logistics service to its customers to track their shipment scheduled times.
Kenya Airways, Rwanda Air, Precision Air also adopted cargo business to survive.
“For the past three months, there has been a huge demand of personal protective equipment from Europe to America and large airlines such as Ethiopian Airlines had the capacity to compete for such tenders,” said Cornwell Muleya, chief executive, Uganda Airlines.
Due to its small aircrafts, the airline, Muleya says, did not pursue cargo as a means of sustenance and left it for bigger carriers.
Uganda Airlines was launched last year since its closure in 2001 after facing financial difficulties.
This worked to their advantage since they still had capital to see them through this period even as the borders closed.
“We had to secure liquidity and limit expenses and renegotiated all our contracts ,” said Mr. Muleya
The airline maximized on repatriation flights and offered charter flights services upon request to its clients.
With most of the airlines in Africa resuming their international flights in August, majority are calling for cooperation rather than competition as a strategy to recover.
“We need a lot of cooperation in airport authorities for us to access more customers.
We should also collaborate in crucial trainings to minimise operation costs and do everything possible to stimulate the market,” said Patrick Mwanri, Group Managing Director and CEO Precision Air Services.
The airlines agree that this is the time for the Yamasoukro Agreement to be implemented. While Africa is home to 12 per cent of the world’s population, it only accounts to per cent of global air market service which is too low. This is because most countries restrict their air service markets to protect the share held by state owned air carriers.
Endorsed in 2002, the Yamoussoukro Decision (YD)remains the single most important air transport reform policy initiative by African governments to date, adopted in recognition of these protectionist measures.
The treaty grants fifth freedom transit rights between all of its members as well as eliminatesrestrictions on ownership of airlines and frequency limits on international routes.
Fifth freedom transit rights allow an airline from one country to fly between two different countries.
However, the full potential of the YD is yet to be realised. “The pandemic is an opportunity for the treaty to be implemented and develop a single Africa market sky,” notes Muleya
Gobena Mikael, Chief Operating Officer Rwanda Air adds that the voice of the aviation sector is rarely heard and road transport has always been prioritized while air is seen as a luxury urging the industry players to cooperate and move beyond talk to action.
Most airlines are preparing to resume services in August with Rwanda Air working towards being leaner, to cut costs while maintaining efficiency.
For instance, they have continuous contracts for safety of crew and passengers and have been conducting training seminars to realign with the safety requirements.
They will also have one large box of a hot meal once they are done to minimize on movement of crew and ensure that materials such as headsets and seat belts are sanitized.
Last week, Kenya Airways together with other budget airlines resumed domestic flights after implementing the stipulated safety measures required by the Ministry of Tourism.
Kenya Airways announced that there will be no meals served during the flights, and that their attendants’ and passengers’ physical contact will be limited.
Their planes have also been fitted with High-Efficiency Particulate Air (HEPA) filtration systems to clean the air during flights.
However, the airline capacity will not be reduced to factor in social distancing rules when both domestic and international flights resume.
In efforts to support the sector, the government waived landing and parking fees at the airports.