Airlines in Africa and the Middle East received $6.84 billion in state aid last year but may require additional government support to soften Covid-19's blow on the sector, according to the International Air Transport Association.
Despite African airlines securing $2.04bn in government aid last year, eight operators on the continent filed for bankruptcy or entered into administration in the past 12 months, said Kamil Al-Awadhi, Iata’s new vice president for Africa and the Middle East.
Middle Eastern airlines received $4.8bn in state support last year, mostly through direct cash injections, Mr Al-Awadhi said on Wednesday.
African and Middle Eastern airlines “would need a little bit more this year than they did last year”, he said.
Regional airlines require funds to pay for aircraft deliveries that were postponed to this year and to cope with the coronavirus pandemic's fallout, he said.
“We hope that by the last quarter of this year, aviation will pick up substantially and that would generate enough revenue to get some of the airlines out of trouble,” said Mr Al-Awadhi.
Governments around the world have provided vital cash and other relief measures to keep their airlines afloat amid the Covid-19 pandemic, which hit air travel demand.
Total state aid provided by governments stands at more than $225bn.
Of this, “only a small part” was provided to airlines in the region, said Mr Al-Awadhi.
The Dubai government pledged to inject additional capital into Emirates, which has helped to transform the city into a global travel centre. However, it did not disclose the amount of financial support.
Sharjah-based Air Arabia, the UAE's only listed airline, said in March that it was holding discussions with the federal government for support should the need arise.
The airline said it did not currently need state aid as it was doing well.
Iata urged governments to increase their collaboration and recommended the use of digital travel apps to ensure a safe resumption of travel.
The Iata Travel Pass, a health app that is currently being tested, will be released on Apple's iOS platform by April 15 while the Android version will “take a little longer”, said Mr Al-Awadhi.
The digital passport for Covid-19 test results and vaccine certificates was originally scheduled for release at the end of March.
"But the application will only achieve its success once airlines, countries, airports also accept it," Mr Al-Awadhi said.
"This is why we are doing the trials with a large number of airlines in different regions."
Virgin Atlantic is one of the latest airlines to trial digital health passports, with plans to test the Iata Travel Pass on its London to Barbados route from April 16.
The first group of travellers using the Iata Travel Pass landed at London's Heathrow Airport on a Singapore Airlines flight after a successful trial of the app, the airline body said on March 17.
Emirates and Etihad Airways earlier announced that they will also run Iata Travel Pass trials.
Four reasons global stock markets are falling right now
There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:
1. Rising US interest rates
The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.
Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”
At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.
2. Stronger dollar
High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.”
3. Global trade war
Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”
4. Eurozone uncertainty
Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.
Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”
The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”
Temple numbers
Expected completion: 2022
Height: 24 meters
Ground floor banquet hall: 370 square metres to accommodate about 750 people
Ground floor multipurpose hall: 92 square metres for up to 200 people
First floor main Prayer Hall: 465 square metres to hold 1,500 people at a time
First floor terrace areas: 2,30 square metres
Temple will be spread over 6,900 square metres
Structure includes two basements, ground and first floor
Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
