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African airlines projected to book Sh500bn losses

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A Kenya Airways plane at the JKIA in Nairobi. FILE PHOTO | NMG

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Summary

  • The expected 2022 losses, however, will be lower than what was recorded last year by $3.7 billion, implying that the industry is showing some signs of recovery albeit slowly.
  • In February 2022, the aviation lobby estimates that African airlines’ capacity reached 64 percent compared to the same period in 2019 as some of the carriers expanded their routes.
  • On Monday, Kenya Airways announced the suspension of some routes as it cut frequencies to some of its destinations.

African airlines are projected to book a $4.9 billion (about Sh500bn) loss in revenue this year as the aviation industry continues to reel under the weight of Covid-19 containment measures.

The expected 2022 losses, however, will be lower than what was recorded last year by $3.7 billion, implying that the industry is showing some signs of recovery albeit slowly.

African Airline Association (AFRAA) says the losses are expected at a time when air travel continues to experience strict advisories, insistence on full vaccination and forceful jabs at ports of arrival.

“Airline revenues remained low with many operators battling with cash-flow issues. Full-year revenue loss for 2022 is estimated at $4.9 billion, equivalent to 28.2 percent of the 2019 revenues,” said AFRAA.

In February 2022, the aviation lobby estimates that African airlines’ capacity reached 64 percent compared to the same period in 2019 as some of the carriers expanded their routes.

AFRAA said four African airlines continued with their international expansion and by end of last year had exceeded the number of international routes operated pre-Covid.

Eleven other African airlines also either re-opened routes or launched new international destinations.

“As at the end of January 2022 African airlines had reinstated approximately 78.7 percent of their pre-Covid international routes, though frequencies remained low,” said the agency.

On Monday, Kenya Airways #ticker:KQ announced the suspension of some routes as it cut frequencies to some of its destinations.

The national carrier has also postponed the launch of flights to Italy even as it suspended its operations to Cameroon due to low demand for passengers.

The airline was to start flying to Rome and Milan in June but it says the plans have been put on hold due to lower demand than it had earlier projected.

In the latest route review by the carrier, KQ has ramped up flights to London from five currently to daily as it cut frequencies from Nairobi to Kisumu from 26 times a week to 17 on the back of low season.

“The postponement is in light of reduced passenger demand as a result of slower than expected recovery from the Covid-19 pandemic,” said KQ in a statement.

Countries have in the last couple of weeks been relaxing restrictions on Covid-19 coming as a major boost for airlines which have been calling for an end to the protocols.

The sector through their lobby, International Air Travel Association (IATA), has been calling on governments to ease restriction measures to allow for recovery of the industry.

IATA reported a sharp 11-percentage point increase in international tickets sold in recent weeks in comparison with the number sold in 2019 as a result of easing restrictions.

The Ugandan Ministry of Health announced that the mandatory Covid-19 testing of all incoming travellers at Entebbe International Airport upon arrival had been stopped with effect from February 16, 2022.

“Effective February 11, 2022, passengers entering England who are fully vaccinated are not required to book a day-2 arrivals test,” the ministry said.

Australia opened its international borders on February 21 to all vaccinated tourists, nearly two years after the island nation first imposed some of the world’s strictest Covid-19 travel restrictions.

The World Health Organisation has, however, urged countries to remain vigilant as they continue to monitor and report sequences.

Globally, the number of cases reached 426 million and 11.5 million in Africa as of February 2022.

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