New Covid variant dampens efforts to revive global aviation

July 9, 2021 / Comments (0)

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Airlines continue to stare at a bleak future with another round of the Covid-19 variant that has seen carriers suspend flights or reduce frequencies to some of their destinations.

Health experts have warned that the Delta variant that was first discovered in India — is on track to become the most dominant version of the coronavirus worldwide with the World Health Organisation announcing that it has been detected in at least 92 countries.

Just last week, Kenya Airways announced it has cut its frequencies to Uganda because of high cases of Covid-19 reported there, leading to a total lockdown by the authorities.

Portugal, Spain and Germany have issued new travel restrictions in a bid to limit the spread of the contagious variant.

In June, Emirates Airline suspended passenger flights from Uganda to Dubai until further notice, responding to a UAE government directive which stopped Ugandans travelling to the region.

Rwanda Air too suspended flights to and from Entebbe International Airport.

“We have reduced flights from 12 weekly to nine. This is occasioned by the low loads as a result of the lockdown, as we continue to monitor the situation,” said Kenya Airways in an interview.

Uganda is one of the key routes for Kenya Airways, having the most frequencies in the region. Thus, low demand on the route is set to impact on the carrier’s earnings.

The emergence of Delta variant means a number of countries are set to impose more strict measures, a move that will force airlines to cut flights or suspend them all together.

From July 1, passenger flights from the UK were banned from landing in Hong Kong under new regulations to limit the spread of the Delta variant.

South Africa last week extended a night curfew and introduced a ban on gatherings, alcohol sales, indoor dining and some domestic travel for 14 days to mitigate a worrying surge in cases driven by the new variant.

Two local carriers in South Africa have also suspended their flights because of the pandemic and lockdown measures that have been put in place.

The imposition of lockdown is set to take another toll on airlines earnings even as the sector continues to struggle with low numbers.

IATA is projecting a post-tax losses of Sh5.1 trillion ($47.7 billion) in 2021 from their initial Sh4 trillion ($38 billion) projection in December.

“Financial performance will be worse and more varied this year than we expected in our December forecast, because of difficulties in controlling the virus variants and slower vaccination in some regions,” said IATA.

The variant will hamper summer bookings, which form the bulk of airlines earnings in a given year due to high demand for travel.

Sharp decline on summer bookings saw Kenya Airways losses nearly triple to Sh36.2 billion in the year ending December 2020 as the carrier sank deeper into the red following a slump in passenger numbers occasioned by Covid-19.

IATA, however, said cargo remains a very strong business for airlines in 2021 as the strong economy and restocking is driving an increase in share of world trade, with 13.1 percent growth in volumes, which is higher than the World Trade Organisation forecast growth for global trade of eight percent.

Source: Business Daily

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