Associated Press has reported African airlines were adding debt long before the pandemic, with government bailouts allowing them to continue for years, but some will find it harder to survive as sub-Saharan Africa faces a recession, the news source said.
Questions are swirling in Africa and elsewhere over the financial wisdom of sustaining prestige carriers that often have a tiny share of an aviation market that sees no recovery in sight.
In some cases, local airlines are so important for pan-African business on a vast continent with historically poor infrastructure that their collapse would cripple speedy travel. In other cases, however, airlines have been seen as vanity projects for states that can hardly afford to support them.
Nowel Ngala, commercial director of Asky Airlines — a carrier launched in 2010 by a group of regional banks hoping to solve transport difficulties in central and West Africa — said the pandemic has been very devastating to the company, whose nine aircraft are grounded.
The International Air Transport Association in April warned that African airlines could lose USD 6 billion in passenger revenue compared to last year, and half of the region´s 6 million jobs in aviation and related industries could be lost. Air traffic this year is expected to fall by half, it said.
Ethiopian Airlines, Africa´s only profitable airline in recent years, has signaled distress, citing revenue losses of up to USD 550 million between January and April. As a survival measure, the airline has thrown itself into cargo operations, including shipping medical supplies across Africa and to other continents.
Addis Ababa, Ethiopia´s capital, has become Africa´s gateway to Gulf nations and beyond. Now it is a key hub for shipping humanitarian supplies during the pandemic.
Another major African airline, South African Airways, hasn´t been profitable since 2011 and has been under bankruptcy protection since December. Tired of issuing bailouts, the government is demanding a new business plan.
Employees have taken pay cuts of up to 80% as Kenya Airways undergoes a re-nationalization process started last year to help it return to profitability. In February the airline received a government loan of nearly USD 5 million to overhaul its fleet´s engines.
Kenya Airways, which depends on passenger traffic for 90% of its revenue, will have to pivot to cargo and reduce its network to create an agile state carrier.
In Rwanda, the government said it will increase its funding to national carrier RwandAir, whose cost-trimming includes pay cuts of up to 65% and the suspension of contracts with some pilots and non-essential staff until further notice.
Air Zimbabwe, the one-plane national carrier of the southern African nation, was saddled with debt of more than USD 300 million even before the pandemic. The airline said in April it was forcing dozens of employees into unpaid leave until the Boeing 767 can fly passengers again.