By Adeniyi Onifade
Combination of the effects of the Russian-Ukraine war and the COVID-19 pandemic are going to cause Nigerian airlines and others across Africa to lose $700 million in 2022, International Air Transport Association, IATA has revealed.
The Director General of the International Air Transport Association (IATA), William M. Walsh made the disclosure at its 78th Annual General Meeting and World Air Transport Summit in Doha, Qatar. The event held between 19 to 21 June, 2022, attracted the industry’s most senior leaders from among IATA’s 290-member airlines, as well as leading government officials, strategic partners, equipment suppliers, and media.
Africa accounted for 1.9 per cent of the total world passenger air travel market in May 2022, the International Air Transport Association reports.
In IATA’s latest analysis of demand for passenger air travel worldwide and by region which is based on traffic data collected during May 2022 as compared to same period in the previous year, African airlines recorded a 134.9 per cent rise in Revenue Passenger Kilometres flown.
In the same analysis, the IATA pointed out that African Airlines increased capacity by 78.5 per cent and also achieved a 16.4 percentage point rise in the average load factor per flight, taking it to 68.4 per cent. The IATA however noted that this was the lowest among all regions worldwide.
Walsh said inflation, interest and exchange rates would affect the growth of the aviation industry globally, stressing that countries should learn from the COVID-19 pandemic.
Willie Walsh also said: “Governments must have learned their lessons from the COVID-19 crisis. Border closures create economic pain but deliver little in terms of controlling the spread of the virus. With high levels of population immunity, advanced treatment methods, and surveillance procedures, the risks of COVID-19 can be managed. At present, there are no circumstances where the human and economic costs of further COVID-19 border closures could be justified.
“Completely removing all COVID-19 restrictions is the way forward, with Australia being the latest to do so this week. The major exception to the optimism of this rebound in travel is China, which saw a dramatic 73.2 per cent fall in domestic travel compared to the previous year. Its continuing zero-COVID policy is out-of-step with the rest of the world and it shows in the dramatically slower recovery of China-related travel,” according to Walsh.
“The travel recovery continues to gather momentum. People need to travel. And when governments remove COVID-19 restrictions, they do. Many major international route areas – including within Europe, and the Middle East-North America routes – are already exceeding pre-COVID-19 levels, Walsh said at the occasion.
The impact of Russia’s invasion of Ukraine on aviation paled, compared with the unfolding humanitarian tragedy.
The war in Ukraine would not escalate beyond its borders, but the rising fuel costs and a dampening demand due to lowered consumer sentiment would have a negative effect on the aviation sector.
Russian international market, Ukraine, Belarus, and Moldova accounted for 2.3 per cent of global traffic in 2021, noting that about 7 per cent of international passenger traffic would normally transit Russian airspace (2021 data), which was now closed to many operators, mostly on long-haul routes between Asia and Europe or North America. However, there could be significantly higher costs for re-routing for those carriers affected.
Just under 1 per cent of global freight traffic originated in or was transited through Russia and Ukraine, but the greater impact was in the specialised area of heavy-weight cargo where Russia and Ukraine were the market leaders.
At $192 billion, fuel was aviation industry’s largest cost item in 2022 (24 per cent of overall costs, up from 19 percent in 2021), findings have revealed.
This is based on an expected average price for Brent crude of $101.2/barrel and $125.5 for jet kerosene. Airlines are expected to consume 321 billion liters of fuel in 2022 compared with the 359 billion liters consumed in 2019.