The Economic Commission for Africa (ECA) and the African Airlines Association (AFRAA) have offered prescriptions on how pandemic-wrought carriers in Africa could overcome liquidity crisis.
The two continental bodies said they will continue to push for direct government for airlines.
With an estimated revenue loss of over $10.21 billion in 2020 by African carriers , the bodies said the only way to ride out of liquidity crisis is for governments to push for more financial support, which remains critical to drive the industry to survival.
Speaking in an interview, AFRAA’s Secretary General, Abderahmane Berthe said governments of countries on the continent should implement measures including : provision of grants, loans and loan guarantees, issuance of equity , deferring or waiving payments of debts, rents, charges and taxes by airlines to fix the many liquidity challenges affecting airlines.
Besides, he said there is need for the respective governments to ascertain the indebtedness of airlines to banks, financial institutions, aircraft leasing companies and aircraft manufacturers.
Such understanding, the AFRAA scribe said will shed more light on the financing options and cost structures of the airlines.
He said : “ This strategic will provide a financing lens to understand the COVID-19-induced challenges faced by African airlines and also the efforts undertaken to address these challenges.
“There is need to understand the huge differences in the size and structure of the debts of airlines. This suggests that a one-size-fits-all solution may not be appropriate to address their liquidity challenges. Financial support must therefore be tailored to the specific features of airlines.
“AFRAA, in collaboration with industry stakeholders and air transport organiSations, continues to advocate for direct government support for airlines and for them to create a platform to coordinate their efforts towards the survival of the industry, in particular by linking airlines and financial institutions and facilitating access to available funds.
“AFRAA has appealed to governments in Africa to create more development finance institutions which will assist with facilities to help mitigate the impact of the pandemic on vital sectors of the economies of countries on the continent.”
Last week, ECA and AFRAA published a report on the financial impact of COVID-19 pandemic on African airlines and insights for the recovery from the liquidity crisis.
The report was a fall out of a survey jointly conducted by the two organisations to quantify the indebtedness of African airlines from COVID-19 impacts as a basis for campaigns for the much-needed financial support.
The report articulated strategies and plans for the survival, recovery and sustainability of the industry suggesting that many carriers are facing insolvency as their operations remain grounded as a result of travel restrictions to curb the spread of the pandemic.