*IATA: International Airlines Lose $252bn *Air Peace Loses N2.1 bn in 3 Weeks
*Travel Agencies Lose N180bn*Business Jets Lose Patronage
International and local airlines have recorded huge losses occasioned by the global pandemic, Coronavirus and there are indications that many airlines would go under without lifeline from government.
The International Air Transport Association (IATA) said international carriers have lost $113 billion, as lock down by nations forced suspension of flight operations globally, noting that it might get worse if the devastation caused by the virus continue to obstruct flight operations.
IATA said the damage being inflicted on the global airline industry by the COVID-19 crisis has greatly intensified and last week it estimated that the industry would require up to $200 billion in government relief measures to survive the current liquidity crisis.
But as the nations close their borders and international flight operations for passenger service has scaled down by over 80 per cent, IATA projected that the airlines need more relief measures.
“The International Air Transport Association (IATA) now sees 2020 global revenue losses for the passenger business of between $63 billion (in a scenario where COVID-19 is contained in current markets with over 100 cases as of 2 March) and $113 billion (in a scenario with a broader spreading of COVID-19). No estimates are yet available for the impact on cargo operations.
“IATA’s previous analysis (issued on 20 February 2020) put lost revenues at $29.3 billion based on a scenario that would see the impact of COVID-19 largely confined to markets associated with China. Since that time, the virus has spread to over 80 countries and forward bookings have been severely impacted on routes beyond China.
“While some governments have stepped up with support, many more need to follow to prevent the collapse of the airline industry. Financial markets have reacted strongly. Airline share prices have fallen nearly 25 per cent since the outbreak began, some 21 percentage points greater than the decline that occurred at a similar point during the SARS crisis of 2003. To a large extent, this fall already prices in a shock to industry revenues much greater than our previous analysis,” the global body said.
In Nigeria, domestic airlines have lost over 80 per cent of their market and are forced to bring down air fares to the “level that cannot even cover cost of fuel just to attract passengers to travel.”
The Chief Operating Officer (COO) of Air Peace, which dominates the market by over 54 per cent, Mrs. Toyin Olajide disclosed to THISDAY in Lagos that the airline has lost about N2.1 billion in the last three weeks and has continued to lose money as low factor has ebbed below 40 per cent.
“We have been losing a lot. We lose money daily because passenger figures have dropped by 60 per cent. We lose N100 million daily and we have been doing that in the last three weeks. People are no longer flying. We now attract passengers by lowering the fares since the past three weeks.
“We charge N23, 000 ticket for over 100 passengers in one flight. That is below the cost of fuel for a flight. We have to count the cost of insurance, spares and getting spares is very difficult now as there are no more international flights. So if you don’t have aircraft spares in your store, it becomes very difficult to replace the one in the aircraft because there are no flights.
“Under the period of this pandemic, airlines are the worst hit. So we call on the federal government to see how they can help airlines, as other countries are doing; otherwise jobs will be lost. This is a global problem. No airline can even pay salary this month. For the airlines to be afloat we need government support. Government can start by giving domestic airlines waivers on charges and taxes; unless they want the airlines to die,” Mrs. Olajide said.
The President of the National Association of Nigerian Travel Agencies (NANTA), Bankole Bernard said the sub-sector has already lost about N180 billion and as international flights become grounded with the closure of borders by many countries, the downstream sector of the aviation industry would record more losses.
The association lamented that due to downturn of business occasioned by the virus ravaging the world, 24, 000 travel agents may lose jobs.
According to him, travel agents were expected to remit monies generated on sales of tickets over a period of time to IATA, but unfortunately they have not been able to sell tickets and the few tickets sold have not been paid for. Therefore, it would be difficult to remit the monies to IATA at these trying times, he said.
The Chairman of Airline Operators of Nigeria (AON), Captain Nogie Meggison, told THISDAY in an interview in Lagos yesterday that load factor in domestic operation has drastically gone down and it would get worse with the shut down of economic activities by the Lagos state government in the bid to check the spread of pandemic.
“The load factor is out. How long can we survive this way? Load factor is below 40 per cent so airlines are not even getting the cost of operation so the best thing is to stop. The problem is that interest rates continue to grow. Banks will not recognise the economic downturn caused by COVID-19. The value of the aircraft is going to be down and even when you ground your aircraft when the calendar dates comes for mandatory checks, you must conduct the checks. If this shut down continues to summer the market will be distorted.
“The whole problem is in a spin right now. We are still going to do retraining of pilots overseas but no country will open its borders for you. Insurance will continue to run but the airlines can only change premium from airborne insurance to ground insurance after 30 days, which will save them 20 per cent of the premium. The whole thing is a spin,” Meggison said.
The Chairman and CEO of Quits Aviation, the major private jet terminal at the Lagos airport, Sam Iwuajoku, told THISDAY that contrary to reports that some highly placed Nigerians have adopted charter operation instead of scheduled passenger service, that the whole aviation industry is in a swoon because patronage is generally low and demand for charter is very low.
He expressed hope that the industry would recover after the pandemic.
It is believed that the aviation industry would be the hardest hit and it would take the sector a longer time to recover, even with government reliefs.
