TIG Post

Tag: International Air Transport Association

  • Focus Africa project to promote development and enhance security -IATA

    Focus Africa project to promote development and enhance security -IATA

    The International Air Transport Association (IATA) is launching ‘Focus Africa’ to strengthen aviation’s contribution to Africa’s economic and social development and improve connectivity, safety and reliability for passengers and shippers.

    This initiative will align private and public stakeholders to deliver measurable progress in six areas.

    “Africa accounts for 18% of the global population, but just 2.1% of air transport activities (combined cargo and passenger). Closing that gap, so that Africa can benefit from the connectivity, jobs and growth that aviation enables, is what Focus Africa is all about,” said Willie Walsh, IATA’s Director General.

    Infrastructure constraints, high costs, lack of connectivity, regulatory impediments, slow adoption of global standards and skills shortages affect the customer experience and are all contributory factors to African airlines’ viability and sustainability.

    The continent’s carriers suffered cumulative losses of $3.5 billion for 2020-2022. Moreover, IATA estimates further losses of $213 million in 2023.

    Delivering on Africa’s Opportunities

    Sustainably connecting the African continent internally and to global markets with air transport is critical for bringing people together and creating economic and social development opportunities.

    It will also support the realization of the UN’s Sustainable Development Goals (UN SDGs) for Africa of lifting 50 million people out of poverty by 2030. In particular, trade and tourism rely on aviation and have immense unrealized potential to create jobs, alleviate poverty, and generate prosperity across the continent.

    Africa has a solid foundation to support the case for improving aviation’s contribution to its development.

    Pre-COVID aviation supported 7.7 million jobs and $63 billion in economic activity in Africa. Projections are for demand to triple over the next two decades.

    “Africa stands out as the region with the greatest potential and opportunity for aviation. The Focus Africa initiative renews IATA’s commitment to supporting aviation on the continent. As the incoming Chair of the IATA Board of Governors, and the first from Africa since 1993, I look forward to ensuring that this initiative gets off to a great start and delivers benefits that are measurable,” said Yvonne Makolo, CEO of RwandAir and first female Chair of the IATA Board of Governors (2023-2024).

    Six Critical Areas

    “The limiting factors on Africa’s aviation sector are fixable. The potential for growth is clear. And the economic boost that a more successful African aviation sector will deliver has been witnessed in many economies already. With Focus Africa, stakeholders are uniting to deliver on six critical focus areas that will make a positive difference. We’ll measure success and will need to hold each other accountable for the results,” said Walsh.

    The six focus areas are:
    Safety: Improve operational safety through a data driven, collaborative program to reduce safety incidents and accidents, in the air and on the ground.

    Infrastructure: Facilitate the growth of efficient, secure, and cost-effective aviation infrastructure to improve customer experience and operational efficiency.

    Connectivity: Promote the liberalization of intra-African market access through the Single African Air Transport Market (SAATM).

    Finance and Distribution: Accelerate the implementation of secure, effective and cost-efficient financial services and adoption of modern retailing standards.

    Sustainability: Assist Africa’s air transport industry to achieve the “Net Zero by 2050” emissions targets agreed to by industry and the UN’s International Civil Aviation Organisation (ICAO) member states.

    Future Skills: Promote aviation-related career paths and ensure a steady supply of diverse and suitably skilled talent to meet the industry’s future needs.
    The Power of Partnerships

    “Partnerships will differentiate the outcome of Focus Africa from previous efforts to stimulate Africa’s development with air transport. By partnering, stakeholders will effectively pool their resources, research, expertise, time and funding to support the common goals of the six work areas,” said Kamil Al Awadhi, IATA Regional Vice President for Africa and the Middle East.

    The partners will be announced and join forces in Addis Ababa on 20-21 June to officially launch the Focus Africa initiative with more details for each task area.

    The timing is right

    Africa continues the path to recovery from the COVID-19 crisis. Air cargo is 31.4% over 2019 levels and air travel is 93% of 2019 levels. Full recovery for air travel is expected in 2024.

    “The tasks for Focus Africa are not new. Work is already underway as part of the work of IATA and other stakeholders in Africa. But after the financial trauma that the pandemic brought to African aviation, we are at a unique time of rebuilding. By launching Focus Africa now, we can ensure that the recovery from COVID-19 moves aviation to an even better place than we were in 2019,” said Al Awadhi.

  • Avoid the temptation to prevent the return of airline revenues, advises IATA

    Avoid the temptation to prevent the return of airline revenues, advises IATA

    The international airline trade organization has warned Ghana against taking any action that may obstruct the repatriation of revenues by its members.

    Due to the potential impact on airline profitability, the International Air Transport Association (IATA) advised the government to resisted the temptation to take such a step.

    The country’s appeal to foreign investors would also be affected by such a decision, which would also stall the nation’s progress in terms of the advancements made in the aviation industry.

    There are reports about Ghana planning to follow in the footsteps of Nigeria which has blocked multinationals including international airlines from repatriating their profits.

    Sources said the government was planning to introduce a fresh policy to restrict access to foreign currency for imports as well as block investors seeking to repatriate their profits from doing so as part of a broader bid to halt the fast depreciation of the local currency.

    But IATA maintained that any imposition of such policy may derail gains made by the country in the aviation industry over the years.

    The Regional Vice-President of IATA in-charge of Africa and Middle East (AME), Kamil Al-Awadhi, at the fourth Aviation Ghana Stakeholders Breakfast Meeting in Accra, observed that any attempt to impose a policy of such nature may do Ghana more harm than good.

    Consequently, he commended the government and the Bank of Ghana (BoG) for the exemplary way by which it was managing the repatriation of airline funds despite the economic challenges faced by the country.

    The context

    Nigeria last year blocked international carriers operating in that country from repatriating their profits amounting to some US$450 million as at July last year.

    Africa’s largest economy restricted access to foreign currency for imports and for investors seeking to repatriate their profits as the country addressed a severe US dollar shortage.

    ICAO process

    Mr Al-Awadhi also called on Ghana to follow the International Civil Aviation Organisation’s (ICAO) process of increasing airport charges.

    “Ghana must also resist the appetite of increasing charges without following the ICAO principles; such increases can lead to the erosion of Ghana’s competitiveness as a destination,” he said.

    He said adherence to ICAO’s policies on charges and infrastructure through consultations with airlines and industry players was prior to ensuring fairness.

    He said the recent increase in charge by Ghana Civil Aviation Authority (GCAA) and the introduction of new charges by Ghana Airport Company Limited (GACL) was an example in question.

    Resilience

    The vice-president noted the airline industry has been resilient in the face of the global pandemic, coronavirus COVID-19 crisis that shocked and disrupted the everyday lives of citizens of the world.

    He said last year, airlines worldwide lost a combined US$6.9 billion down from the US$9.7 billion in 2021.

    He said the fact that airlines were able to cut their losses in 2022 in an era of rising cost, labour shortages, strikes, operational disruptions and many mishaps plus growing economic uncertainties speaks volumes about people’s desire and need for connectivity.

    According to him, in 2023, it was expected that the industry would accrue US$4.7 billion profit, the first industry profit since 2019 which according to him was a great achievement, considering the scale of the financial and economic dimension caused by the governments’ imposed pandemic restrictions.

    The global economy

    The Minister of Transport, Kwaku Ofori Asiamah, said it was common knowledge that the global economy heavily depended on the air transport industry.

    He said aviation connected people, cultures, and businesses reiterating the importance of the industry to the global economy.

    However, he said the industry evolved around many different factors and actors for growth.

    He said it was not the right time to raise charges while some actors in the value chain were trying to make up for the lost revenues during the COVID-19 pandemic.

    The minister added that every increase deterred travellers and accrued less revenue not just for the airline but also for stakeholders across the aviation value chain, including manufacturers, maintenance, ground support.

    The meeting

    The breakfast meeting, which is an initiative of Aviation Ghana, is a series of dialogues that feature selected topics and is aimed at influencing government policies in favour of businesses in the aviation industry.

    It brought together players in the private sector, policy makers and people from the government to deliberate on the recovery of the aviation industry.

    On the theme, “Post-COVID-19 recovery process and the journey ahead. “Discussants included the Managing Director of GACL, Pamela Djamson-Tettey; Deputy Director General of GCAA, Daniel Acquah; customer service expert, J. N. Halm; and Accountable Manager of Passion Air, Edward Annan.

  • Nigeria blocks over $500 million of airlines’ cash from being repatriated

    The International Air Transport Association (IATA) issued a warning that in the previous six months, the amount of airline money for repatriation that have been blocked by governments increased by more than 25% ($394 million).
    The total amount of frozen funds is already very close to $2 billion.

    In more than 27 countries and territories, airline cash cannot be repatriated.
    Nigeria ($551 million), Pakistan ($225 million), Bangladesh ($208 million), Lebanon ($144 million), and Algeria ($140 million) are the top five markets with blocked funds (excluding Venezuela).

    Willie Walsh, IATA’s Director General, noted that: “Preventing airlines from repatriating funds may appear to be an easy way to shore up depleted treasuries, but ultimately the local economy will pay a high price. No business can sustain providing service if they cannot get paid and this is no different for airlines. Air links are a vital economic catalyst. Enabling the efficient repatriation of revenues is a critical for any economy to remain globally connected to markets and supply chains.”

    Total airline funds blocked from repatriation in Nigeria are $551 million. Repatriation issues arose in March 2020 when demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations.

    Despite these challenges Nigerian authorities have been engaged with the airlines and are, together with the industry, working to find measures to release the funds available.

    “Nigeria is an example of how government-industry engagement can resolve blocked funds issues. Working with the Nigerian House of Representatives, Central Bank and the Minister of Aviation resulted in the release of $120 million for repatriation with the promise of a further release at the end of 2022. This encouraging progress demonstrates that, even in difficult circumstances, solutions can be found to clear blocked funds and ensure vital connectivity,” said Kamil Al-Awadhi as Regional Vice President for Africa and the Middle East.

    IATA , therefore, called on governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities, in line with international agreements and treaty obligations.

  • IATA predicts that African Airlines will lose US$638 million in 2022

    African airlines are expected to post US$638 million losses in 2022, narrowing to a loss of $213 million in 2023, the latest International Air Transport Association (IATA) forecast shows.

    The African region, according to IATA, is particularly exposed to macro-economic headwinds which have increased the vulnerability of several economies and rendered connectivity more complex.

    Passenger demand is expected to grow at 27.4%, outpacing capacity growth of 21.9%.

    Over the 2023 year, the region is expected to serve 86.3% of pre-crisis demand levels with 83.9% of pre-crisis capacity.

    On the global level, the International Air Transport Association (IATA) expects a return to profitability for the global airline industry in 2023, as airlines continue to cut losses stemming from the effects of the COVID-19 pandemic to their business in 2022.

    Willie Walsh, IATA’s Director General, noted that: “Resilience has been the hallmark for airlines in the COVID-19 crisis. As we look to 2023, the financial recovery will take shape with a first industry profit since 2019. That is a great achievement considering the scale of the financial and economic damage caused by government imposed pandemic restrictions.  But a $4.7 billion profit on industry revenues of $779 billion also illustrates that there is much more ground to cover to put the global industry on a solid financial footing.

    Many airlines are sufficiently profitable to attract the capital needed to drive the industry forward as it decarbonizes. But many others are struggling for a variety of reasons. These include onerous regulation, high costs, inconsistent government policies, inefficient infrastructure and a value chain where the rewards of connecting the world are not equitably distributed.”

    Globally, in 2023, airlines are expected to post a small net profit of $4.7 billion—a 0.6% net profit margin. It is the first profit since 2019 when industry net profits were $26.4 billion (3.1% net profit margin).

    In 2022, airline net losses are expected to be $6.9 billion (an improvement on the $9.7 billion loss for 2022 in IATA’s June outlook). This is significantly better than the losses of $42.0 billion and $137.7 billion that were realized in 2021 and 2020 respectively.

  • Government starts stakeholder engagement over Central, Western regions airport

    The intended construction of an airport to service both the Central and Western areas has already begun with stakeholder participation.

    The military airport in Takoradi is used for regularly scheduled commercial flights, but the Central region currently lacks a functioning commercial airport.

    The choice of whether to build a single airport to service both regions or one in each region has gone through several stages.
    Ankaful was previously suggested as a potential site for an airport serving the Central Region.

    Due to its extensive history and UNESCO World Heritage castles located along the coast, the Central region is a popular tourist destination in the nation but is only reachable by road.

    Connecting with the regional capital, Cape Coast, from Accra is hampered by heavy vehicular traffic. It takes about two (2) hours to connect from Accra on a typical weekend when many people usually travel for tourism and social events.

    Cape Coast played a crucial role in the success of the Year of Return held in Ghana in 2019. Indeed a total of US$1.9 billion was generated into the economy through activities related to the “Year of Return.”

    The programme also brought about an increase of over 200,000 in total arrivals into the country.

    The Western Region is also one of the country’s most endowed areas and the oil hub. The region also hosts a lot of foreign companies operating in the mining, manufacturing and other sectors.

    Presenting the 2023 Budget to Parliament, Finance Minister, Ken Ofori-Atta, gave the clearest indication that one airport will be constructed to serve both regions.

    “Mr. Speaker, Phase II of Kumasi Airport Expansion Project is fully completed while Phase III is 89.33 percent complete. Additionally, a draft feasibility report on the Central/Western Region Airport was submitted and is being subjected to stakeholder engagement,” he said.

    Commenting on the proposed airport, Sean Mendis, a commercial aviation expert, told AviationGhana exclusively that: “In general though, investment in aviation infrastructure is always a positive thing provided projects also are maintained well. Ghana already has a very robust culture of domestic air travel, and one of the highest number of per capita domestic travellers in sub-Saharan Africa.”

    He added that the need for maintenance should be factored into the cost of the projects. “Airports are not build and forget projects unfortunately. They have to be maintained and operated at a professional standard to continue to be operational, so any investment needs to budget for that as well.”

    Economic benefits of airports

    A study by the International Air Transport Association (IATA) shows that the economic benefits of aviation investment are still large, and provide a strong justification for investment in the aviation industry.

    The study found that for developing economies, the annual economic rates of return range from 16% to 28%.

    “Developing countries face capital costs, especially for new aircraft, that are similar to those faced by developed countries. As such, though the boost to GDP is higher in proportional terms for developing economies, the capital costs are still high. Nevertheless, the available economic return is still large and provides a strong justification for investment in the aviation industry,” he said.

    “There are significant and positive benefits generated by investment in aviation infrastructure and services, particularly in developing economies. By increasing a country’s connections to the global air transport network, investment in aviation can boost its long-term productivity and economic growth.”

    “Greater aviation connectivity – and the improvements in productivity and GDP growth it can provide – can also help to boost a country’s competitiveness. By way of illustration, the World Economic Forum (WEF) has developed a Global Competitiveness Index for the travel and tourism sector.”

    The WEF’s index incorporates many of the factors necessary to develop connectivity and create wider economic benefits in terms of productivity and economic growth.

    There is a clear positive relationship between a country’s connectivity and its performance in the WEF index.

  • Air travel to recover fully in 2024 – Transport Minister

    By 2024, the Kotoka International Airport’s passenger volume should have fully recovered from the COVID-19 pandemic’s effects.

    Ghana’s transport minister, Kwaku Ofori Asiamah, said in his speech at the 41st ICAO triennial meeting in Canada that “passenger traffic is picking up after the disastrous impact of the COVID-19 pandemic on the aviation industry.”

    Ghana is now functioning at about 70% of its capacity, and its transport minister, Kwaku Ofori Asiamah, stated that the country hopes to attain full capacity by 2024.

    The International Air Transport Association (IATA) announced passenger data for August 2022 showing continued momentum in the air travel recovery.

    Total traffic in August 2022 (measured in revenue passenger kilometers or RPKs) was up 67.7% compared to August 2021. Globally, traffic is now at 73.7% of pre-crisis levels.

    Domestic traffic for August 2022 was up 26.5% compared to the year-ago period. Total August 2022 domestic traffic was at 85.4% of the August 2019 level.

    International traffic rose 115.6% versus August 2021 with airlines in Asia delivering the strongest year-over-year growth rates. August 2022 international RPKs reached 67.4% of August 2019 levels.

    “The Northern Hemisphere peak summer travel season finished on a high note. Considering the prevailing economic uncertainties, travel demand is progressing well. And the removal or easing of travel restrictions at some key Asian destinations, including Japan, will certainly accelerate the recovery in Asia. The mainland of China is the last major market retaining severe COVID-19 entry restrictions,” Willie Walsh, IATA’s Director General said.

    African airlines experienced a 69.5% rise in August RPKs versus a year ago.

    August 2022 capacity was up 45.3% and load factor climbed 10.8 percentage points to 75.9%, the lowest among regions.

    International traffic between Africa and neighbouring regions is close to pre-pandemic levels.