$601 Million in African Airline funds remain blocked – IATA

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Over US$ 30bn has been pledged for air transport and tourism in Africa by International finance agencies and other institutions including the African Development Bank, African Export-Import Bank, African Union, and the International Monetary Fund (IMF).  However, most of this relief is yet to reach the airlines and wider industry in desperate need.

In 2020, African airlines secured US$ 2.04 billion in government aid.  Most of this was distributed through direct government loans, equity financing, and cash injections. Despite this, 8 airlines in Africa filed for bankruptcy or entered business administration over the past 12 months

In addition to this, $ 601 million in airline funds remain blocked in Africa across 17countries (Algeria, Angola, Benin, Burundi, Central African Republic, Eritrea, Ethiopia, Equatorial Guinea, Malawi, Mozambique, Nigeria, Sudan, Gabon, Cameroon, Chad, Congo, and Zimbabwe) putting further pressure on airlines as they struggle for survival.“

The International Air Transport Association (IATA) has outlined the main priorities for African governments to ensure that the airline, travel, and transport industry survives the COVID-19 crisis and can play a role in the economic recovery of the continent

Continued financial relief and the release of committed aid and blocked funds

African airlines posted a combined US$2bn loss in 2020. This year, only a slight improvement to a US$1.7bn loss is expected as the struggle with COVID-19 continues.  Looking ahead it’s unlikely that traffic will return to post COVID-19 levels until 2023.  Financial relief measures are still desperately needed, particularly those that do not increase the industry’s debt burden.” Additional relief measures and activating existing pledges are essential,” said Kamil Al Awadhi, IATA Regional Vice President Africa, and the Middle East.

Government relief comes in many forms. Cost reductions in terms of taxes and charges will help. And the release of the $ 601 million of airline revenues that are currently blocked from repatriation in certain governments would be an immediate boost in some markets. Governments will need a financially viable air transport sector to energize economic recovery from COVID-19. Many of Africa’s airlines were weak even before the crisis. Reducing costs and freeing blocked cash have long been a priority for African aviation. If ever there was a time for decisive government action on these issues, it is now,” said Al Awadhi.

Safe reopening of borders

The African Union has taken leadership in preparing for the safe restart of aviation in Africa through its “Saving Lives, Economies, and Livelihoods” campaign. This promotes collaboration between different sectors of governments involved in the crisis including Ministries of Health, Transport, and IT.  IATA supports the AU’s efforts and urges governments in Africa to take the following actions:

  • Replace quarantine measures with testing

Today 20 countries in Africa have quarantine measures in place. Quarantine essentially means borders are closed.  It is critical that those African governments implement effective alternatives to quarantine measures such as pre-departure testing for international travel, especially from countries with a similar risk profile.

Accept a reasonable validity period of five (5) days for COVID-19 testing for travel

Taking into account the waiting period for COVID-19 testing, the turnaround time of the results, and the accessibility of testing facilities on the continent, we urge governments in Africa to consider accepting the AU recommended validity period of five (5) days for COVID-19 testing for travel across the continent.

  • Avoid COVID-19 vaccination as a mandatory pre-entry and exit criteria

In line with the WHO, the airline industry does not support mandatory vaccination as a precondition to fly. Many potential travelers, particularly in Africa, cannot be vaccinated or will not have access to vaccines. Along with testing and track & trace capabilities, vaccination can be a tool to support the safe re-opening of borders without quarantine.

Planning for a safe Restart

Preparing the industry to safely restart after a year or more of disruption will take careful planning and advanced preparation. Governments need to develop the benchmarks and plans that would enable a safe, orderly and timely restart. That means working with governments in at least two areas:

Establishing operational restart plans

Safety remains the industry’s main priority and is a critical pre-condition for restarting operations and for the build-up of traffic thereafter. Restarting an airline is not like flipping a switch; as such it is important to understand government plans. Airlines need to ready their crew, technical personnel and aircraft. After a year of lockdowns, this requires refresher training, checks and coordination. On top of that airlines will need time to market their services so that there are fare-paying passengers when operations resume.

Putting tools in place to manage new COVID-19 testing and vaccine requirements

Testing and vaccinations will play a role as the pandemic comes under control and economies ramp up, including the travel sector. Efficient digital management of health credentials is vital to restart. Manual processes will not be able to cope with volumes once the recovery begins. Digital solutions must be secure, work with existing systems, align with global standards and respect data privacy.

IATA has developed IATA Travel Pass to manage health credentials, protect against fraud and enable a convenient travel process.  It is being trialled by a number of airlines and airports around the world, including Ethiopian Airlines and RwandAir in Africa.  Another major African carrier is expected to come on board soon.

IATA Travel Pass compliments the work being done by the AU to safely manage travel.Currently, IATA Travel Pass manages COVID-19 test requirements.  Once global standards to record digital vaccine credentials have been developed, the app can also be used by travelers to manage their proof of immunization. The WHO is currently developing these global standards and we urge African governments to adopt these for those people who have been vaccinated and plan to retrospectively record those who have already been vaccinated.

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