The Independent Uganda: You get the Truth we Pay the Price
Airlines under siege
Africa’s airlines also face tough choices. Many of them were already in bad shape before the pandemic. As airports shut down, air traffic has been reduced to cargo transport and occasional repatriation flights. The number of scheduled seats on flights to and from African countries fell by 70% in the four weeks to 6 April, according to OAG, which collects flight data.
There has been a “complete disappearance of demand,” says Raphael Kuuchi, vice-president for Africa at the International Air Transport Association (IATA), an industry body. Its economists expect airline revenue in the region to drop by $6bn this year, with passenger numbers cut in half.
Airlines are in discussion with insurers, creditors and lessors to delay or reduce payments, Kuuchi adds. They are also asking governments for support such as loans, guarantees and tax relief. The median African airline had only about two months of cash and equivalents at the start of this year, which may run out before the recovery arrives.
South African Airways, which was already severely financially troubled, is lurching towards liquidation after the government refused to give it any further funding.
Struggling Kenya Airways is seeking a bailout and even Ethiopian Airlines, one of the region’s best-run carriers, lost $550m to coronavirus in the first three months of the year.
“Depending on what level of support we get from governments, some airlines might not come back after this pandemic,” says Kuuchi.
Africa World Airlines (AWA), a private carrier headquartered in Accra, is better placed than most. It has few debts and has been planning for coronavirus since January, with advice from its Chinese shareholder HNA Group, which also owns Hainan Airlines.
“The real challenge is not right now in a shutdown period but it’s going to be when operations restart,” says Sean Mendis, AWA’s chief operations officer.
“Right now you’re not burning money on direct operating costs. But when things restart it will be a slow growth. We’ll be flying planes 20-30% full initially. And then you’ll be incurring full costs as well as having significantly reduced revenue.”
Pressing the reset button
By mid-April few African governments had offered targeted support to the tourism sector, though several had offered general packages of tax relief. Meanwhile tourist businesses were trying to plan for the future without knowing when lockdowns would end and travel restrictions ease.
“The worst of it is the uncertainty,” says Oscar Plans of Wildplaces, which runs three safari lodges in Uganda. “If we knew this was a two-month thing then we could sit in a cave and wait for the storm to pass. But there’s only so long you can wait.”
Wildplaces is allowing customers to postpone into the high season, which runs from June to September. It has frozen rates for 2021.
Even after the pandemic is over, the recovery will take time. A safari is “a bucket list trip”, says Jan Beekwilder of SafariBookings.com – the sort of experience that many Western travellers will put off until more stable times. Immediate hopes lie with a resurgence in domestic tourism and business travel.
“We’re pressing the reset button,” says Ntshona of South African Tourism. That might mean overhauling data systems, reconsidering policy or putting new emphasis on domestic travellers.
“This is the perfect time to do all the spadework that we have not done previously. We have sat on decisions without implementing them. Well guess what? Now we don’t have a choice.”
That view is shared by Mariam Nezar and Laila Hassaballa, who run a small business called Bellies En-Route offering food tours of Cairo.
“On the one hand I’m obviously very anxious,” says Nezar. “But at the same time I feel like [the interruption] has been a blessing in disguise, because it pushed us into thinking outside the box, pulling out ideas that we’ve always had but never really had the time to focus on.”
Those ideas include a travel blog and a cookbook of traditional recipes. They also want to tap into the domestic market with tours taking Cairenes to other parts of Egypt.
Tom Katsyamira, who runs the Embassy Hotel in Mbarara, south-west Uganda, is also rethinking his strategy.
“I am looking at venturing into other areas,” he says. “For example outside catering, where you can go and offer services in somebody’s home when he has a small function. You can start baking – as we are closed down I see people are still eating bread!”
For tourist businesses everywhere, versatility and ingenuity will be essential in the uncertain months ahead.
****
CLICK TO READ ONLINE MAGAZINE HERE
