African and Middle Eastern airlines may need more state aid in 2021, Iata's new regional chief says

Regional operators require funds to pay for deferred aircraft deliveries

Ras Al Khaimah, United Arab Emirates - Reporter: Deena Kamal. Business. Aviation. Kamil Al-Awadhi, Regional Vice President for Africa and the Middle East, IATA at the Arab Aviation Summit 2021 at the Al Hamra Convention Centre in Ras Al Khaimah. Monday, March 22nd, 2021. Ras Al Khaimah. Chris Whiteoak / The National

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.

EDITOR'S PICKS
NEWSLETTERS