With most airports closed and flights grounded for the past two months, South Africa’s aviation sector is teetering on the brink of collapse. The situation is so dire that a delegation representing the industry has called on the South African government to provide “specific financial relief” to the sector to help cushion the blow of the COVID-19 crisis.
The International Air Transport Association (IATA), estimates the South African aviation market is set to lose around $3 billion in revenue in 2020, representing a 56 % reduction compared to last year. Such a steep drop is revenue is bound to have a severe impact on jobs, the industry’s woes puts a quarter of a million people at risk of losing their jobs.
“Aviation is vital for connecting markets and moving people and goods between them. It is not an indulgence of the rich, but an enabler of economic wealth for everyone. Without a viable air transport sector, recovery will be drawn out and painful. South Africa’s economy had already slowed before the crisis, with unemployment at record levels. Fully supporting aviation now is critical if the economy is to expand at a pace that will make a positive difference to its citizens’ lives,” said Muhammad Albakri, IATA’s Regional Vice President for Africa and the Middle East.
The COVID-19 pandemic has hit the country’s economy hard, with many economists projecting a steep rise in unemployment, and GDP contraction of around 16 %. Since the implantation of the lockdown, the aviation industry has essentially ground to a halt. South African Airways, which was already undergoing business rescue, faces an uncertain future and might never fly again. Comair, which holds the license to conduct British Airways flights in South Africa has also encountered turbulence and has filed for Business Rescue. Low-cost domestic carrier SA Express was last month provisionally liquidated. The performance of these carriers underscores the severe impact the pandemic has had on the sector as a whole.
President Cyril Ramaphosa’s announcement on Sunday that the country will move to level three of lockdown regulations will have come as a welcome relief to the industry. The relaxation of regulations means airlines will resume limited flights for business travel starting from the beginning of next month.