Direct aid critical for survival of air industry

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AVIATION development manager Jon Howell has urged African governments to pull all the stops to bail out the continents’ carriers currently on their knees due to the financial fallout wrought by Covid-19.

The virus detected in China late last year has seriously disrupted aviation with most countries introducing stringent travel advisories or outright bans in order to restrict the spread of the virus.

With air transport demand falling off a cliff, the CEO of AviaDev Africa – a forum dedicated to growing connectivity to, from and within the African continent – said state aid is a necessary measure to ensure aviation as a whole, survives Covid-19.

A lot of these airlines are government-owned airlines and ultimately their survival depends on how much governments are willing to support them and I think in the case of SAA (South African Airways) there isn’t enough money in the system to keep the oxygen flowing,” Howell told Chief Koti’s Ultimate Tourism Chat Episode 4.

“So there is talk there about liquidation maybe that won’t happen, maybe they will be a brand new airline. What I would say and this to quote Raphael Kuuchi (IATA Vice President for Africa) who was on my webinar a couple of weeks ago. He said ‘this is the next existential crisis.

“If we don’t get that support we are going to be starting with no airline because they cannot survive based on zero revenue.’ So what it is going to come down to is which governments can afford to and choose to prop up their national airline and how long this (Covid-19) goes on for. People don’t realise when an airline is not operating it costs a fortune to store the aircraft and maintain it. They only make money when these birds are in the air.”

Howell said the as the battle to contain the Covid-19 pandemic continues, the process of industry recovery cannot be completely disregarded.

He added that consumer confidence and regaining the trust of travellers will be integral to the timing and speed of industry recovery.

“The most important thing to do at the moment is to engage all of the stakeholders – so creditors, employees, get them on board get them to understand the magnitude of the situation,” he said.

“We need to keep communicating…The point is we are in risk mitigation mode which is to communicate, engage, have those collaborations use this time to reinvent your business model. What do we think the business will look like post-Covid-19 and what do we need to put in place now to make sure we are in the best position in the new environment.”

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