The aviation industry has been battered by the COVID-19 pandemic. As industry partners globally and in Africa brainstorm on how to curb the spread of the pandemic while returning the industry to sustainable operation, Alexandra Guillot, industry consultant and CEO of Hi-Fly Marketing throws new light on the path to industry recovery in Africa, offering deeper insights on how to save the industry from total collapse, in this exclusive interview with Aviation & Allied Business Journal.
Q: How would you describe the impact of the COVID-19 Pandemic on Africa’s airline industry?
A:It is difficult to describe what the impact of the pandemic will really have on the Africa’s airline industry. The entire African airline sector has effectively been grounded. It is today estimated that 50% of airlines worldwide will not recover from the Pandemic; obviously the most fragile will go first. Most airlines in Africa are small and suffer from limited financial resources; it seems fair to say that they are a lot more fragile and could potentially be highly impacted.
IATA estimates that African airlines could lose $6 billion of passenger revenue compared to 2019. However, we must consider that Africa has been a lot less affected by the virus so far and that several airlines have already restarted operation like Africa World Airlines in Ghana; which is extremely encouraging.
Q: Given that African airlines predominantly have limited cargo revenue and heavily dependent on passenger revenue, do you expect revenue to return sooner to African airlines post-COVID-19?
A:I think Cargo flights have been the only ones operating when the whole of Africa was in lockdown. Airlines have put a lot of efforts in trying to assist with the pandemic through cargo, also allowing themselves to generate some source of revenue during this time. For example, Precision Air has ventured into cargo-only flight business strategy to navigate around the economic hurdles brought by the Covid-19.
Q: How do you think African Airlines can return to safe, secure operation post-COVID-19 given that these airlines have been mainly on lockdown except for occasional emergency operations?
A: A lot of work is being put together to ensure safe operations across the industry by Airports, authorities, associations, airlines, etc. It is quite impressive to see how the various stakeholders in South Africa, for example, are working together to allow the industry to restart and ensure safe operations for both public and staff.
Emergency and repatriation flights have given a good basic guideline to put together the rules the industry will be required to follow when restarting operations.
Q: Do you think African Airlines deserve any waivers or support from African Airports to encourage the Airlines back into service given the impact of the COVID-19?
A:One must bear in mind the importance of air transport on the African continent to understand why Airlines would deserve any assistance they can get. Road and railway transport are both underdeveloped.
The aviation industry plays a vital role in achieving sustainable development in Africa. The expansion of air services is a necessary condition for the development of a diversified export base across the continent, for the expansion of tourism to the region, and for supporting rapid economic growth and increasing personal mobility.
It seems that a number of African airports and air traffic management companies have already offered some relief measures for airlines, like Ghana Airports Company, Namibia Airports Company, Seychelles Airports.
Q: There is a fervent call by the global and African aviation community for government financial and other support to help quick recovery of the African Airlines. Would you think this is essential for recovery of Africa Airlines?
A:Following what I just mentioned about the importance of Air transport on the continent and the fragile situation of numerous airlines, it seems necessary for governments to consider supporting the industry. An appeal has been made by International Air Transport Association (IATA), World Tourism Organization (UNWTO), World Travel & Tourism Council, African Airlines Association (AFRAA) and Airlines Association of Southern Africa to the international community to help Africa’s travel and tourism sector which supports millions of livelihoods across the continent.
Several African countries have already provided some support to the air transport sectors by means of direct business and industry tax relief – Botswana, Ivory Coast, Ghana, Kenya, Senegal, to name a few. IATA also praised the African Development Bank for allocating $10 billion in Covid-19 financial relief and the African Union for committing $12.5-million and persuading its member States to each assign $4.5 million to counter the pandemic and assist with the recovery of the continent’s aviation sector.
Q: What do you think is the place of Consulting in helping African Airlines get back on their feet post-COVID-19?
A:Airlines will need to get back to very lean operations post COVID-19 and therefore use all the advice they can get to reach this objective. Consulting might be necessary in various areas such as support for leaders and departments on their strategic and organizational issues, transactional financial issues including fundraising, financial due diligence, etc.; and operational issues like business plan, cash management and working capital, budget, fleet selection, routes, etc. But it could also assist in transition management and punctual operational support from a high-level manager, to improve performance during this period of transformation.
Q: If there is one area of major challenge you expect or foresee in the recovery of the air transport industry in Africa from COVID-19, what would it be?
A:Depending how long the crisis goes on for, there might be several challenges we can expect. I think harmonisation of procedures around safety in travelling will be the main one. Mainly because most of the international transport is operated by non-African airlines and because most regional flights require several stopovers to reach destination; hence maximising risks of infection and the need for cooperation between airlines, airports, security companies, etc.
I agree with what IATA CEO said,that “We need a solution for safe travel that addresses two challenges. It must give passengers confidence to travel safely and without undue hassle. And it must give governments confidence that they are protected from importing the virus.” However this might be easier said than done and surely will take some time to run smoothly around the world and on the continent, while creating another challenge on ticket fares.
Q: Would you say Airlines industry would be permanently changed by the effects of the COVID-19 or do you see the industry in Africa running as usual as before COVID-19?
A:The Covid-19 pandemic could be a great opportunity to see things differently.
There are very valid discussions happening at the moment into having airlines joining force around common project instead of having a myriad of small and fragile carriers. Consolidation of knowledge, resources, operations, and open skies might become a possibility and maybe the only possibility.