This archive report was first published on 11 May 2020.
Published on May 11, 2020, the Covid-19 pandemic has brought the global economy to its knees, with the aviation industry being one of the hardest hit sectors.
The International Air Transport Association (IATA) estimates that the aviation industry supports 65.5 million jobs with an economic impact of $2.7 trillion globally.
However, in Africa, the sector contributes an estimated $55.8 billion to the economy, at 2.6 per cent of gross domestic product (GDP), and supports close to 6.2 million job opportunities.
Kenya's aviation industry is also severely affected, with the sector contributing up to 4.6 per cent of GDP and supporting 410,000 jobs indirectly.
According to IATA, airlines in Africa could lose upwards of $4.6 million due to the pandemic, with many operators barely breaking even during good times.
Mr Allan Kilavuka, the group managing director and chief executive officer of Kenya Airways, notes that the industry is likely to take up to two years to return to even 75 per cent of its pre-Covid-19 operations.
He also suggests that the crisis provides a glimpse of what the future holds, with more business travellers opting for online meetings and training, and leisure travel taking time to recover due to reduced disposable income.
However, an upsurge of demand is likely right at the end of the Covid-19 crisis, which will then die off in about a month.
With these scenarios, airlines will be tempted to sweat assets as much as possible to regain market share, leading to excess supply and a general drop in yields and profitability.
On the other hand, the availability of financing may allow aggressive and ambitious start-ups with cost advantages and digital practices to enter the market.
Africa has a wide range of natural and human resources, but its economic development is disproportionate to its size and potential.
The aviation industry epitomises this problem, with Africa commanding a paltry two per cent of the air traffic, both passengers and goods.
A way has to be found for Africa to work more closely to take advantage of its own markets and build its capacity.
