The coronavirus pandemic is wreaking so much havoc across many sectors of the economy including the global Aviation industry.
Experts in the industry are predicting a decrease in air traffic in the next decade due to travel restrictions imposed as part of measures to deal with the pandemic.
The International Air Transport Association (IATA), for instance, on its analysis of the revenue impact of the COVID-19 pandemic on the global aviation industry estimates that industry passenger revenues could drop to $252 billion or 44% below 2019’s figure.
‘This is in a scenario in which severe travel restrictions last for up to three months, followed by a gradual economic recovery later this year’, IATA said to explain its projections.
IATA’s previous analysis of up to a $113 billion revenue loss was made on 5 March 2020. Before countries around the world announced travel restrictions that largely eliminated the international air travel market.
The situation in Ghana is such that the proportion of occupied seats of major international airlines servicing the Kotoka International Airport (KIA) has dropped by between 10-15 percent since the end of February
Industry players in the country have also complained of a 10 percent drop in forward booking for April and May.
A 2018 ministry of finance report showed that the Ghana Airport Company Limited collected revenue to the tune of GHc475.56 million through airport taxes alone, representing 35% increase from the previous year.
However, the Company may not increase or repeat the figures this year due to the seize on travels and visits as a result of the outbreak of the pandemic.
Picture of Global Aviation Industry
The impact of the pandemic is severe on all Airline operators across the world.
South African Airways is seeking $1.2 billion in state bailout. According to Bloomberg, administrators running South Africa’s national airline have appealed to the government to provide a 21 billion Rand ($1.2 billion) bailout to help repay debt and resume operations after the lifting of Covid-19 travel ban.
17 billion Rand out of the bailout that the company is seeking will go into repayment of the airline’s creditors, the Bloomberg reported added
Also, Airline giants such as American Airlines and Virgin Atlantic have begun positioning their passenger aircraft to carry cargo.
EasyJet, a Switzerland based budget Airline, recently announced plans to ground its entire fleet. British Airways suspended all flights departing from its base at Gatwick Airport.
Again, it is estimated that airlines in China will have a revenue loss of USD19.4 billion and up to USD22.5 billion in the worst case scenario in the first half of 2020
Similarly, Latin America’s largest airline LATAM of Chile is seeking U.S. bankruptcy protection. LATAM posted profits for four consecutive years totalling more than $700 million. It had recently approved a dividend payment. However, LATAM recently laid off 1,800 employees out of over 40,000 in the lead-up to its bankruptcy filing.
The British Airways proposes to make 12,000 staff redundant. This will affect more than 1,000 pilots. The Airline says it is taking this decision now, in order to saves many jobs in future.
Below are highlights of how players in the 100 year old global aviation industry are faring amid the pandemic
- Virgin fires more than 3,000 people including 600 Pilots.
- Virgin Australia files for Bankruptcy.
- Thai Airways files for bankruptcy.
- Air Mauritius goes into Administration.
- South African Airways is Bankrupt.
- Finnair returns 12 planes and lays off 2,400 people.
- YOU grounds 22 planes and fires 4,100 people.
- Ryanair grounds 113 planes and gets rid of 900 pilots for the moment, 450 more in the coming months.
- Norwegian completely stops its long-haul activity!!! The 787s are returned to the lessors.
- SAS returns 14 planes and fires 520 pilots… The Scandinavian states are studying a plan to liquidate Norwegian and SAS to rebuild a new company from their ashes.
- Etihad cancels 18 orders for A350, grounds 10 A380 and 10 Boeing 787. Lays off 720 staff.
- Emirates grounds 20 A380s and cancels all orders for the Boeing 777x (150 aircraft, the largest order for this type). They *”invite”* all employees over 56 to retire
- Wizzair returns 32 A320s and lays off 1,200 people, including 200 pilots, another wave of 430 layoffs planned in the coming months. Remaining employees will see their wages reduced by 30%.
- IAG (British Airways’ parent company) abandons the takeover of Air Europa (and will pay €40 million compensation for that).
- IAG (Iberia) grounds 56 planes.
- IAG (British Airways) grounds 34 planes. Everyone over 58 to retire.
- Luxair reduces its fleet by 50% (and associated redundancies)
- CSA abolishes its long-haul sector and keeps only 5 medium-haul aircraft.
- Eurowings goes into Bankruptcy
- Brussels Airline reduces its fleet by 50% (and associated redundancies).
- Lufthansa plans to ground 72 aircraft (in 2 instalments).
- Hop is studying the possibility of reducing fleet and staff by 50%.
- Currently, 60 new aircraft stored at Airbus with no buyers in sight (order cancellations) including 18 A350s.
- They forecast a minimum of 8,000 grounded planes by September* that would make *more than 90,000 unemployed pilots worldwide
By Salifu B.B. Moro