Covid-19 costs aviation industry k134 billion
The country’s aviation industry has lost an estimated K134 billion in revenue due to the Covid-19 pandemic which slowed down business, figures from the Ministry of Finance show.
In its Economic and Fiscal Policy Statement 2021, the ministry said recovery of the air transport sector is projected to take long.
Reads the statement in part: “In the large part of 2020/21 financial year, commercial flights were suspended as a measure of containing the spread of the pandemic.
“Government will continue to monitor the situation and consult with experts on the necessary response to the pandemic by this sector.”
On April 1 2020, the Department of Civil Aviation suspended all international flights to and from Malawi to contain the spread of Covid-19 in the country.
The suspenction exempted flights ferrying health personnel, essential essential health equipment and emergency relief items while flights ferrying returning Malawi citizens and residents or cargo were handled on a case by case basis.
The ban was lifted on September 1 after “considering adverse effects of the suspension of air travel on all sectors of the economy”.
Following the impact of the pandemic, 54 million passengers flew by plane within Africa in 2020 while in the previous year, twice as many travelled.
Figures from the African Airlines Association show that the turnover of airlines on the continent decreased by around $8 billion.
In an interview on Monday, Ministry of Finance spokesperson Williams Banda admitted that government has been affected in carrying out some critical projects and social services due to under-collections as a result of the reduced revenues from the country’s aviation industry.
Speaking separately, Malawi Airlines chairperson George Partridge said the aviation industry has been one of the worst hit by the pandemic together with its sister industry, tourism and hospitality with over half of the airlines either bankrupt, in administration or being bailed out.
He said Malawi Airlines could not fly for seven months despite servicing its fixed costs, but is in the process of resuscitating itself to provide a strategic service to the nation amid the epidemic.
Said Partridge: “Because the airline margins are thin, any such disturbance disrupts the business severely. The same way the industry is affected when there is a major recession or when there is an oil crisis.
“The more than seven months Malawi Airlines was not flying had a severe negative cash flow effect on the business. We are coping with current restrictions and we believe that with the gradual easing of restrictions, business will once again be sustainable for us albeit with the usual thin margins that characterise aviation.”
Aviation industry expert Tony Chimpukuso said in an interview on Monday that the sector has been hit hard with the suspension of flights, thereby putting to question its sustainability.
