(3 minutes read)
· The Economic Commission for Africa (ECA) and the African Airlines Association (AFRAA) estimated that the African airlines incurred a loss of US$10.21 billion in 2020 due to the impacts of the pandemic
· The industry, therefore, has urged the governments to take urgent steps to provide grants, loans and loan guarantees, issuing equity and also deferring or waiving payments of debts, rents, charges and taxes by airlines
· Many of the airlines are facing insolvency as their operations have ground as a result of travel restrictions to curb the spread of the pandemic.
The Economic Commission for Africa (ECA) and the African Airlines Association (AFRAA) estimated that the African airlines incurred a loss of US$10.21 billion in 2020 due to the impacts of the pandemic.
The industry, therefore, has urged the governments to take urgent steps to provide grants, loans and loan guarantees, issuing equity and also deferring or waiving payments of debts, rents, charges and taxes by airlines.
The report also puts forth plans for the survival, recovery and sustainability of the industry. Many of the airlines are facing insolvency as their operations have ground as a result of travel restrictions to curb the spread of the pandemic.
Both ECA and AFRAA have jointly conducted a survey to quantify the indebtedness of African airlines from Covid-19 impacts. The report forms the basis for demanding a survival package from respective governments to put back the aviation sector on rails. The report is titled: “Policy research paper Covid-19 and African airlines overcoming a liquidity crisis,” focuses on the indebtedness of airlines to banks, financial institutions, and aircraft leasing companies and aircraft manufacturers. The report reveals huge differences in the size and structure of the debts of airlines and suggests that a one-size-fits-all solution may not be appropriate to address their liquidity challenges. Financial support must therefore be tailored to the specific features of airlines.
