Over 30,000 jobs at risk as coronavirus ravages airlines
By Moses Omusolo | March 23rd 2020
Kenya’s economy stands to lose more than 30,000 jobs as well as billions of shillings in revenue, as the coronavirus pandemic attacks the aviation industry.
In response to the escalating crisis, the International Air Transport Association (Iata) has asked Kenya and other African governments to urgently support airlines or risk the worst for their economies.
Iata Director General Alexandre de Juniac said airlines were facing a “liquidity and existential crisis”.
“Airlines are fighting for survival. Many routes have been suspended in Africa and Middle East, and airlines have seen demand fall by as much as 60 per cent on remaining ones. Millions of jobs are at stake,” Mr Juniac said in a statement on Thursday.
“Airlines need urgent government action if they are to emerge from this in a fit state to help the world recover once Covid-19 is beaten.”
For Kenya, Iata said short-term disruptions from Covid-19 could cut passenger volumes by as much as 622,000 and $125 million (Sh13.2 billion) loss in base revenues.
“The disruptions to air travel could also put at risk more than 36,800 jobs in the country. If the situation spreads further, approximately 1.6 million passengers and $320 million (Sh33.9 billion) of revenue can be lost,” said Juniac.
Kenya Airways has already issued severe cost reduction measures, which include drastic pay cuts, in the wake of suspended flights.
The national carrier announced on Saturday that the chief executive would take an 80 per cent pay cut while other executives would give up three quarters of their salaries.
Other employees will work on a mix of salary cuts and unpaid days from April 1, until the airline returns to profitability.
Other countries at the mercy of the coronavirus pandemic include South Africa, which could lose six million passengers and $1.2 billion (Sh127.8 billion) in revenue.
Iata’s appeal comes as data shows that the air transport’s economic contribution in Africa stands at an estimated Sh5.9 trillion ($55.8 billion), supporting 6.2 million jobs and contributing 2.6 per cent to gross domestic product.
However, the association noted that things have not been looking good for the industry since January, as thousands of passenger flights have been cancelled.
“This is expected to?increase exponentially?with the implementation of additional measures in?different countries,” warned the aviation agency.
It said international bookings on the continent were down by around 20 per cent in March, while domestic bookings have fallen by about 15 per cent over the same period - and expected to fall by another 25 per cent in April.
Slight reprieve at the pump as State slashes fuel prices by Sh5
- Inside State's mega plan to revamp small lake ports
SHIPPING & LOGISTICS
- Taxman bets on digital market to beat Sh1.7tr goal
- Kenya tops in green financing in Africa - report
- Quickmart owner acquires Ruiru based flower farm
- Three reasons why your business is unprofitable