The old saying that the eyes cannot escape bearing the consequences of a diseased nose fits perfectly into happenings in the contemporary aviation industry where the coronavirus pandemic has impacted negatively on the revenues of airlines, airports, travel agents, regulatory, meteorological, navigational aid agencies, cab operators, hoteliers, catering firms, and other businesses in the sector’s value chain.
Although the disease first broke out in the industrial city of Wuhan, China where the fatality figure is estimated at over 3,300, it’s spread to the rest of the world, is believed to have been facilitated by the aviation sector as hundreds of Europeans, Asians, Arabs, and Americans who fled from China at the outbreak of the pandemic on airlines, without any clinical tests that confirmed them negative, are held to have transported the virus to their final destinations.
Economist and travel agent, Israel Akam told Daily Sun that “the aviation sector, is perhaps made to pay a huge price for being one of the major vehicles in the spread of COVID-19.”
“Governments around the world in an attempt to curb the spread of the dreaded virus has ordered the shut down of airports, banned the operations of international flights into their airspace, including the Nigerian government. Aviation is the worst hit in loses after human fatality recorded globally. And critical operators, especially airlines, would require lifelines to survive whenever this scourge is successfully curtailed,” said Akam.
Fears by IATA
The International Air Transport Association (IATA) in its latest analysis on the impact of COVID-19 on the revenue of the global air transport industry estimates revenues plummeting to $252 billion. In Africa, loses are estimated at $4.4 billion as passenger demand for airlines in countries like Nigeria, Rwanda, South Africa, Egypt, Morocco, Angola, Ghana, Ethiopia, among others, has reduced significantly following the partial or total lock down order by their respective governments.
No estimates available yet on impact on cargo flights.
IATA’s Director General and CEO, Alexandre de Juniac said if noting was done to mitigate the impact of COVID-19, the global airline industry would go bust.
“Without immediate government relief measures, there will not be an industry left standing. Airlines need $200 billion in liquidity support simply to make it through,” said de Juniac.
Impact on Nigerian airlines
In Nigeria, the impact has seen airlines, travel agents and airports struggling to cope with falling or zero passenger demand following the outbreak of coronavirus.
Susan Akporiaye, the incoming President of the National Association of Nigeria Travel Agents (NANTA) told Daily Sun that the industry was already facing redundancy and that most establishments were laying off workers as airlines continue to ground their operations.
Most Nigerians who patronise air transport do so for purposes of official (government) work, businesses, academics, conferences, leisure, weddings, burials, and driven by traffic notably from major city airports like Lagos, Jos, Ibadan, Ilorin, Abuja, Kano, Port Harcourt, Owerri, Uyo, kaduna and Calabar. “In the last one week, we have seen that the vast majority of these travels have reduced significantly by more than 60 per cent and it could drop further in the weeks ahead as more airlines discontinue operations as states continue to shut down or scale down government and private sector activities in an effort to prevent the spread of coronavirus,” said a spokesperson of one of the local airlines. “This certainly has an attendant impact on the revenues of airlines like Air Peace, Arik, Aero, Azman, Max Air, and Dana Air. Airlines make their money flying passengers for a fee. And if the airlines are not flying as they ought to, it means service providers, travel agents, caterers etc are also in a bad financial shape. And the routine maintenance of aircraft, which is a must for airlines to remain in business, and which comes from the sales of air tickets, would also be impacted, “said the official, who preferred to speak on the condition of anonymity.
The worse hit, undoubtedly, is Air Peace Airline; it operates the largest fleet of aircraft in the country, a staff strength of over 3,000 and vast network of domestic and regional routes, and one international flight into Dubai/Sharjah, UAE.
In the wake of the spread of coronavirus, the Nigerian carrier has been forced to temporary suspend its domestic and international operations to cities like Dakar,Senegal; Monrovia,Liberia;Freetown,Sierra Leone;Banjul,Gambia and Dubai, UAE. It’s investment in wide bodied Boeing 777 aircraft is also affected as they are put out of use, yet must be continuously maintained. These measures, sadly,comes with dire implications on the airline’s finances.
Airlines battle COVID-19 spread
Amid the impact on their financials, Nigerian airlines, like Air Peace, tried to assist the government and airport authorities in the fight against the spread of CODVIC-19. Prior to the shut down of operations, Safety Manager of Air Peace Airline, Capt. Godfrey Ogbogu, had announced that the carrier had embarked on an extensively sanitisation of all aircraft before flying each day, subjection of passengers to thorough hand sanitisation at the boarding gate and temperature checking for passengers before boarding.
Ogbogu said Air Peace passengers whose temperature reads above 38 degrees are not to be allowed to board and that a refund on air ticket would be issued to them. Even passengers who are checked in by proxy agents are closely monitored to ensure that they are not sick patients who could infect other passengers.
“A passenger who we learnt came into the country from UK and was very sick was stopped by our screening team when he was found to be very sick and we referred him to NCAA, FAAN and Port Health. The passenger was checked in by proxy; maybe because he did want to be noticed to be sick, but the management of the airline had deployed staff who strictly monitor passengers checked in by agents, especially since the coronavirus became global pandemic,” said Chief Operating Officer (COO) of the airline, Mrs. Toyin Olajide. This measures not only prevented the possible spread of the coronavirus, but also boosts the confidence of the flying public on their safety in the airline industry.
Post COVID-19 bailout for airlines
There is need to be optimistic that one day, very soon, the scourge would end. But the aviation sector would have been brought to its knees, going by IATA forecast.
In order to minimize the impact of the virus on the aviation industry, IATA’ has asked governments in Africa consider providing emergency support to airlines fighting to survive as a result of the spread of coronavirus.
“The turn of events as a result of COVID-19 is almost without precedent. Many airlines are cutting capacity and taking emergency measures to reduce costs.Millions of jobs are at stake. Our call to action is for the government to provide relief either through stimulus packages or through suspension of aeronautical charges, alleviation or reduction of some taxes,” the IATA chief said.
Chairman for tht Airline Owners of Nigeria (AON), Capt. Nogie Meggison, has called for palliatives from the Federal government and the Central Bank of Nigeria (CBN) to reduce the burden of colossal losses suffered by airlines. Meggison who described domestic airline as “the drivers of our national economy” demanded that the Ministry of Aviation take steps to ensure airlines are carried along in government palliative and CBN reduced interest rates from nine to five percent per annum for one year and the N50 billion targeted credit facility earmarked to cushion the impact of the virus on businesses.
“Nigerian airlines trade in naira but we do our business in dollars and the naira has come under pressure since the corona virus pandemic. Aviation agencies should help the airlines by immediately streamlining the over 32 multiple charges given to airlines which are mostly double billing. Government should also bear 100 per cent of the cost of disinfecting all aircraft for this period and provide thermal scanners and hand sanitizers as well as mobilise more manpower and training of Port Health Personnel at our local airports to encourage more people to travel,” Meggison also suggested.
NANTA’s top executive, Susan Akporiaye, told Daily Sun that it was important that the CBN place top priority in keeping operators in the aviation sector’s upstream and downstream in business given the massive jobs, estimated at over 100,000, created by these investors and revenue generated to government coffers annually, which has been threatened by the shut down of airports and airline operations.
“We are aware that the World Bank is making funds available to cushion the impact of covid-19, Nigeria should move fast and be a part of it so that aviation can also benefit. If we allow the local airlines to collapse,the travel agency business will also go down,” said Akporiaye.
“The CBN should also provide a zero interest credit to operators to bounce back. We are not saying give us free money because people will abuse it; what we need is a credit facility with a long term repayment plan that would allow airlines and travel agents retool and restructure. Everyone is down; no business, no revenue. Coronavirus won’t last forever, it would go one day, but businesses that are down would require some form of bailout to bounce bask and provide services to the people and government, “she said.
Airlines, indeed, are the most critical operators in the sector, as every other operators revolves around airborne aircraft. The government, therefore, has a duty to see to the survival of local airlines. It is, therefore, not the best of time to overburden Nigerian airlines with multiple taxes considering that the more financially buoyant U.S. and European carriers are enjoying government bailouts. The Federal Government should not expect that like super humans, Nigerian carriers won’t collapse and layoff thousands of workers, which is what the government has been doing in recent years, without offering fiscal support for the survival of airlines given the impact of COVID-19.