Advertisement

COVID-19 will Devastate Africa’s Airline Sector – Recovery Will Require Stronger Transparency

Friday March 27 2020
pic covid

As the global community grapples with the COVID-19 pandemic—which has spread to at least 177 countries with more than 392,000 cases and 17,000 deaths reported —the airline industry has been one of the first sectors to have felt the economic impact of the novel coronavirus.

 When Africa’s flag carriers need help to recover—and they will need help—we must ensure that this crisis is also a chance to turn the page toward greater transparency as we rebuild.

Though infection curves in Africa range from days to weeks behind outbreaks on other continents, airlines are canceling routes, laying off workers and warning that the worst is still to come.

Since the first case was recorded, African airlines have lost $4.4 billion in revenue. Most recently, South African Airlines (SAA) suspended all international flights after closing its domestic network to restructure over financial difficulties last month.

According to the World Travel and Tourism Council.  “A staggering one million jobs are being lost every day” due to the economic effects of the pandemic.

The International Air Transport Association (IATA) has asked governments to consider supporting airlines and airports struggling to survive through tax relief and loans, arguing that airlines will be essential to getting the world up and running again once the outbreak is over. The IATA is likely right about that.

Advertisement

 In an increasingly connected world, many of the fastest-growing industries depend on air travel, and key sectors like tourism will be critical to once more kick start domestic commercial revenue in African countries.

Before we sign any blank checks, however, it’s worth asking if getting back to business as usual is good enough.

The SAA, for example, is currently under investigation by the commission of inquiry vide Times Live 6th Feb, 2020 of SAA paid R1.1 bn to Swissport with a contract piece and News 24 dated 27th March, 2020 of Swissport allegedly had no grounding license among many articled state capture, with accusations ranging from improper procurement procedures, in one case, paying Swiss-owned baggage handling vendor Swissport without a required procedures.

Most of African Airlines are in trouble financially for example the root of SAA’s financial troubles, there is the chronic overpayment to contractors who coerce officials into awarding them sweetheart deals without adequate transparency or oversight.

Swissport is a repeat offender in the region. According to media reports in Tanzania Jan, 24th 2020 and Infrastructure article 2nd March, 2020, Swissport has held a contract with the Tanzania Airport Authority (TAA) since 2001, controlling what is effectively a monopoly that has led to hidden fees, sky-high labor costs and poor working conditions.

 The TAA has taken key first steps toward greater transparency by announcing the first-ever open tender for the contract, though it is still unclear when that tender is taking place, while others report that Swissport Tanzania has allegedly continued working without valid procedures.

Governments in sub-Saharan Africa have been grappling with endemic corruption for years, with successive administrations in several countries trying to sustain slow, hard-won gains and avoid backsliding.

Part of the problem is the asymmetric relationship between governments and the air travel industry countries like Tanzania, which rely heavily on tourism that means they need to attract industry investment to grow air travel.

For perhaps the first time, however, African airlines and associated vendors will need African governments as much as governments need airlines.

The coronavirus pandemic will challenge everyone, and working together to contain both the public health implications and the far-reaching economic consequences will be essential in the weeks and months to come.

 After the crisis is over, however, the public will have unprecedented leverage over the air travel industry. Airlines, airports and associated vendors will need public support, and we can demand accountability in exchange.

After we weather the COVID-19 crisis together, we must move forward together in an era of new transparency and accountability.

The writing was already on the wall for SAA; shortcuts, monopolies and financial mismanagement do not make for a sustainable business.

Related links

  1. https://www.timeslive.co.za/politics/2020-02-06-saa-paid-r11bn-to-swissport-without-a-contract-says-supply-chain-manager/
  2. https://www.news24.com/SouthAfrica/News/swissport-allegedly-had-no-grounding-licence-at-the-time-of-saa-tender-bid-zondo-commission-hears-20200221
  3. https://www.sabcnews.com/sabcnews/zondo-commission-hears-how-swissport-and-saa-worked-together-without-a-contract/
  4. https://www.ippmedia.com/en/business/taa-float-tender-jnia-ground-handlers-next-month
  5. https://infrastructurebrief.com/lets-stop-airport-corruption-and-monopolies-tell-taa-to-hold-an-open-tender-for-jnia/

The views in this opinion article are entirely that of the writer and does not represent the position of the website or Thecitizen