Airlines in all regions are expected to record negative operating income in 2020
Kampala, Uganda | JULIUS BUSINGE | Coronavirus pandemic nearly brought the aviation industry on its knees, with thousands of flights banned in many countries around the world, but it is picking up again.
Several airlines including, Uganda Airlines, RwandAir, KLM, Turkish Airlines, Emirates, Brussels Airlines, Qatar Airways, Kenya Airways, Air Tanzania and Ethiopian Airlines have already been cleared to resume their operations next month, following government’s decision to ease COVID-19 travel restrictions.
President Yoweri Museveni in a televised address on Sept.20 announced opening of Entebbe International Airport on Oct.01 to international commercial passenger flights, targeting mainly tourists and the business executives.
The airlines and industry regulator, Civil Aviation Authority executives that spoke to The Independent said the beginning will be tough.
However, they said that it is significant for them to hit the skies as a step towards boosting confidence to passenger travelers.
This development comes as the latest reports from The International Air Transport Association (IATA) indicates that the impact of COVID-19 on the global economy will be severe and that airlines are staring at huge revenue losses.
The report states that the global GDP growth is expected to contract by 5.0% in 2020 and COVID-19 will have a significant impact on international trade (13% decline) which has been suffering from the US-China trade war.
“2020 will be the worst year in history for airlines (net loss of $84.3billion) and losses will continue in 2021, albeit to a lesser extent,” the IATA’s Economic Performance of the Airline Industry latest report reads in part.
The report adds that airlines in all regions are expected to record negative operating income in 2020. The report states that revenues are expected to fall sharply as airlines significantly discount ticket prices to help stimulate air travel.
“The sharp fall in revenue will lead to high cash burn due to fixed and semi fixed costs,” the report adds.
As a result, the report says, 32 million jobs that are supported by aviation (including tourism) are at risk.
“Restoring air transport connectivity will be critical in the post-COVID period to support the recovery in economic development,” the report further reads in part.
Ivan Mugisha, manager for RwandAir in Kampala told The Independent on Sept.21, that their clients should expect strict adherence to all COVID-19 Standard Operating Procedures and all the necessary requirements for travel to different destinations.
He said going by the regulator’s directive, they will be operating one flight per day unlike the usual four-five flights daily out of Entebbe for the first three months. The number will gradually increase.
“We are so limited but with fewer flights of course you would expect higher demand,” Mugisha said, adding that in order to maintain operations, one would easily expect a hike in the price of tickets to offset the costs of the empty seats.
Given the restrictions, Mugisha said clients should anticipate or look forward to spending more extra hours as they wait their connecting flights to other destinations “because it is really so hard to have a seamless schedule with the minimum connecting time given the current restrictions at the airport.”
Airlines still optimistic
“There is hope and we are optimistic we will have our clients coming gradually which is why airports are reopening,” he said.
Yogi Biriggwa, the country director for South African Airlines and chairperson, Board of Airlines Association Uganda was equally optimistic.
“We are very excited,” she told The Independent on Sept.21 adding that COVID-19 is here to stay.
“We just have to make the best out of the situation… and follow the standard operating procedure (SOPs)…life has to go on…we are happy as airlines and the tourists are ready to come.”
She said South African Airlines had not yet confirmed the date for resuming flights to Entebbe.
Vianney Luggya, the head of public relations for Uganda’s CAA told The Independent on Sept.21 that a tentative flight schedule had already been shared with air operators, covering the first phase of resumption of commercial passenger flights (first three months).
He said the schedule caters for scaled down operations to limit the number of flights landing or taking off at the same time in order to avoid congestion.
“With time, the operations will be increased, and we plan to have more operations in the second phase starting in January 2021,” he said.