The world is in the midst of worst recession ever triggered by Covid-19 outbreak, which has led to a fall in demand not only in oil products but also crippled the aviation sector with low demand in air transportation and other service associated with airlines and airport.
The covid-19 pandemic literally stopped all forms of economic activities due to the lockdown, restriction of movement and social distancing in different countries and cities following the rate of impact.
It is glaring that aviation sector was worse hit by the pandemic, stalling flight operations for more than three months causing a loss of over N6 trillion in Nigeria, according to IATA analysis report covid-19 will see airline passengers revenues drop by 8,314 billion in 2020, that is 55% decline compared to 2019 revenue. This is one huge loss from the almighty Covid-19.
Talking about the losses in the aviation sector following the covid-19 pandemic, most airlines if not all recorded a huge fiscal loss including airlines in U.S and UK, some collapsed like that of South Africa and others filed for bankruptcy.
There was significant reductions in passenger traffic which resulted to flights being cancelled or planes flying empty between airports, which in turn massively reduced revenues for airlines and forced many airlines to lay off employees or declare bankruptcy. Some have attempted to avoid refunding cancelled trips in order to diminish their losses. Airliner manufacturers and airport operators have also laid off employees. According to some commentators, this is surely the worst crisis ever encountered in the history of the aviation industry.
Loss of Jobs: Aviation industry allover was affected, Nigerian airlines were not left out as they had no option but to force workers into compulsory leave without pay to avoid layoffs, workers salaries were slashed by 50% at the early stage but after domestic flight resumed things took a new dimension resulting in Pilots being laid off by Air Peace and Bristow helicopters among others.
The President for Africa and Middle East, IATA, Muhammad Albakri noted that the organization had appealed to the Government, Development banks, and other sources of finance to assist African air transportation. He said Airlines could get back to business with supports like:
- Direct financial support to passenger and cargo carriers
- Loans, loan guarantees and support for the corporate bond market by the Government or Central Bank
- Tax relief – rebates on payroll taxes paid to date in 2020 and/or an extension of payment terms for the rest of 2020
- Financial relief on airport and air traffic control (ATC) charges and taxes
- Reduction, waiver or deferral of government-imposed taxes and fees
- Foreign exchange availability
The aviation sector is a vital economic growth enabler with Data showing the sector contributed N149.35 Billion to Nigeria gross domestic products in 2019. The sector really needs all the support to bounce back to business.
Just like the saying that there’s always a good side in everything. There are few gains of COVID-19 ranging from airlines given bailout like the American Aviation industry ,UK Aviation industry .This is to enable them stay afloat and avoid layoffs. Airlines like Korean Air and Ethiopian airlines bounced back to business with the help of evacuation or repatriation flights and Cargo flights .
Another gain was that Aviation Agencies were forced to sit-up and and restructure the industry like in the case of Nigerian Civil Aviation Authority (NCAA) .