Introducing social-distancing measures in the aviation sector could see seat capacities reduce by 38 per cent and airfare increase by 43 per cent for airlines in Africa and the Middle East if they are to remain viable, warns the International Air Transport Association.

In its analysis of airfares once travel restrictions ease, the international airlines lobby sees a scenario where airlines will be caught between low demand, excess capacity and low fuel prices. This should translate to lower fares, but proposed social distancing measures that will require the middle seat be left unoccupied as well as an increase in turnaround times because of sanitization procedures will push unit costs up, making an increase in airfares necessary.

If airlines don’t increase ticket prices, many will fold, IATA chief economist Brian Pearce said in a briefing last week.

The measures sharply reduce the maximum load factor to 62 per cent, which is below the average industry break-even load factor of 77 per cent. With fewer seats to sell, unit costs would rise sharply, translating into fare increases of between 43-54 per cent compared with 2019, depending on the region.

“Airlines are fighting for their survival. Eliminating the middle seat will raise costs. If that can be offset with higher fares, the era of affordable travel will come to an end. On the other hand, if airlines can’t recoup the costs in higher fares, airlines will go bust. Neither is a good option when the world will need strong connectivity to help kick-start the recovery from Covid-19’s economic devastation,” says IATA’s director-general and chief executive Alexandre de Juniac.

The estimates in fare increases are based on the assumption that airlines will only have 85 per cent available seats occupied. That would translate into a load factors of 53 per cent of the 62 per cent weighted average of seats that will be available after when the middle seat is not occupied.

Airlines in Africa, North America and the Middle East required a load factor of 75 per cent to break even in 2019. That translated into an average fare of $181 in the Middle East and Africa, and $202 in North America. In Africa, fares would rise to $259 and $289 in North America, a 43 per cent increase in both cases. Comparable figures would be a 45 per cent increase fare in North Asia, 49 per cent in Europe, 50 per cent in Latin America, and 54 per cent Asia Pacific.

Source: https://www.theeastafrican.co.ke/business/Prepare-for-costly-air-travel/2560-5551314-thwuev/index.html

 

The Dubai Expo has been postponed for a year after two thirds majority of Bureau International Expositions (BIE) Member states voted for the move.

The Expo 2020 Dubai will now run from October 1, 2020 to March 31, 2022 to allow participants to safely navigate through the impact of the COVID-19 and also refocus World Expo towards identifying new solutions to some of the greatest emerging challenges.

However, the Expo 2020 Dubai will retain its name as a celebration of human resilience, creativity, culture and innovation – including major technological advances in the fields of medicine and science.

The Dubai Airports Chairman His Highness Sheikh Ahmed bin Saeed Al Maktoum who is also the President of the Dubai Civil Aviation Authority, Chairman and CEO of Emirates Group, and Chairman of the Expo 2020 Dubai Higher Committee, welcomed the move saying that it will help shape a post pandemic world.

“We welcome the decision of BIE Member States to support the delay Expo 2020 Dubai by one year. We are thankful to Member States for their continued commitment to contributing to a World Expo in Dubai that will play a pivotal role in shaping our post-pandemic world at a time when it will be most needed,” he said.

 He added, “over the last 50 years, we have sought to build bridges, connections, and partnerships around the world because we believe in genuine collaboration to safeguard the future of all. This swift and overwhelming vote reflects the strength of our international partnerships and truly reflects the positive role the UAE and Dubai play with all countries around the world. This affirmation by the international community of Dubai’s offering and its ability to deliver, further strengthens our commitment to matching ambition with achievement to hosting an event that will capture the world’s imagination, when the time is right”.

The BIE members voted remotely due to the COVID- 19 restrictions that have been put in place to contain the rapid spread.

The BIE Secretary General Mr. Dimitri S. Kerkentzes lauded the swift response by the members to postpone the international expo.

“In their support for the one-year postponement of Expo 2020 Dubai, Member States of the BIE are giving the world the opportunity to reconvene in 2021, when together, we can address the challenges facing humanity and celebrate the unity and solidarity that strengthen us. With its theme ‘Connecting Minds, Creating the Future’, Expo 2020 Dubai will offer the world a unique platform to share the lessons, solutions and ideas for a better tomorrow.”

The Kenya Tourism Board (KTB) has postponed the 10^th edition of the Magical Kenya Travel Expo (MKTE) over the COVID-19 pandemic.

KTB announced the postponement due to growing concerns to the safety of the participants over the highly contagious disease. Since the first case of COVID-19 was reported in March, the government has since put in place measures to contain the rapid spread of the virus which include travel restrictions in regions and international travel, a ban on all gatherings and emphasis on social distancing.

“Our top priority is the health and safety of everyone involved in MKTE. Due to the escalation of the COVID-19 epidemic around the world, KTB would like to inform you that the MKTE 2020 edition which was to be held from 07th to 09th October 2020 has been cancelled. An alternative date will be communicated. We appreciate all the exhibitors, hosted buyers, media, partners and stakeholders who have continued to support MKTE,” the board announced on their web page.

MKTE brings together tourism leaders and policy makers from the East African region to experience and sample leading tourism products and welcomes over 200 exhibitors.

Five international air transport and tourism bodies have launched an appeal to international financial institutions, country development partners and international donors to support Africa’s Travel & Tourism sector which employs some 24.6 million people on the African continent. Without urgent funding, the COVID-19 crisis could see a collapse of the sector in Africa, taking with it millions of jobs. The sector contributes $169 billion to Africa’s economy combined, representing 7.1% of the continent’s GDP. 

The request is being made by the International Air Transport Association (IATA), the World Tourism Organization (UNWTO) of the United Nations, the World Travel & Tourism Council (WTTC), the African Airlines Association (AFRAA) and the Airlines Association of Southern Africa (AASA).

These organizations are jointly calling on international financial institutions, country development partners and international donors to support the African Travel & Tourism sector through these tough times by providing:

• $10 billion in relief to support the Travel & Tourism industry and help protect the livelihoods of those it supports directly and indirectly;
• Access to as much grant-type financing and cash flow assistance as possible to inject liquidity and provide targeted support to severely impacted countries;
• Financial measures that can help minimize disruptions to much-needed credit and liquidity for businesses. This includes the deferral of existing financial obligations or loan repayments; and,
• Ensuring that all funds flow down immediately to save the businesses that need them urgently, with minimal application processes and without impediment from normal lending considerations such as creditworthiness.

Some African governments are trying to provide targeted and temporary support for hard-hit sectors such as Travel & Tourism. However, many countries lack the necessary resources to help the industry and the livelihoods it supports through this crisis. 

The situation is now critical. Airlines, hotels, guesthouses, lodges, restaurants, meeting venues and related businesses face mounting losses. Typically, tourism is comprised of 80% of small and medium-sized enterprises (SMEs). To preserve cash, many have already begun laying off or placing staff on unpaid leave.

“The impact of the COVID-19 pandemic is being felt across the whole tourism value chain. The sector and the millions of livelihoods it supports across the world, including vulnerable communities are particularly exposed. International financial support is key to ensuring that tourism can lead to wider economic and social recovery in these communities,” said UNWTO Secretary-General, Zurab Pololikashvili.

“Airlines are at the core of the Travel & Tourism value chain that has created quality jobs for 24.6 million people in Africa. Their livelihoods are at risk. Containing the pandemic is the top priority. But without a lifeline of funding to keep the Travel & Tourism sector alive, the economic devastation of COVID-19 could take Africa’s development back a decade or more. Financial relief today is a critical investment in Africa’s post-pandemic future for millions of Africans,” said IATA’s Director-General and CEO, Alexandre de Juniac.

“The Travel & Tourism sector is in a fight for survival, with over 100 million jobs losses globally and nearly eight million in Africa alone due to the COVID-19 crisis. Travel & Tourism is the backbone of many economies across Africa and its collapse will lead to hundreds of millions of livelihoods being impacted and enormous financial pressure for years to come. Now, more than ever, it is vital that governments work together on a global coordinated approach towards a swift recovery and ongoing support for Travel & Tourism. It is critical that the most vulnerable communities receive international help. The speed and strength with which the international community comes together and responds through international financial institutions, country development partners and international donors will be paramount to provide support to the many millions of people whose livelihoods are heavily dependent on our sector,” added Gloria Guevara, WTTC President & CEO.

“Air transport and tourism industries are among the worst impacted by the COVID-19 pandemic. Air transport is critical for the economic development and integration of the African continent. As such, support to the airline industry will aid in a faster economic recovery. An end of operations by African airlines would trigger a host of serious financial consequences, while replacing the air service provided by the airlines would be a challenging and costly process. Urgent, immediate and consistent measures need to be taken for the survival and rebound of the industry,” said AFRAA Secretary-General, Abdérahmane Berthé.  

“The impact of COVID-19 in Africa continues to be brutal. Air travel and tourism have essentially shut down. Now, more than ever, international countries need to come together to help those communities that are most vulnerable. The survival of our industry and its allied sectors has serious ramifications for Africa’s entire air transport system,” said AASA CEO, Chris Zweigenthal.

Source: https://www.iata.org/en/pressroom/pr/2020-05-06-01/

 

ICAO has developed a new publication aimed at helping countries to address the aviation safety risks arising due to the global effects of the COVID-19 pandemic.

 

Produced specifically for national aviation regulators and civil aviation authorities (CAAs), the new Handbook for CAAs on the Management of Aviation Safety Risks related to COVID-19 (ICAO Doc 10144) was developed with the support of aviation experts serving on the ICAO Safety Management Panel. An ICAO State letter will be issued to encourage Member States to take advantage of this new handbook.

 

“COVID-19 has presented the entire world with many new types of challenges, and the need to adjust how we conduct ourselves in our day-to-day lives,” commented ICAO Secretary General Dr. Fang Liu.

 

“As a highly integrated and complex network, international aviation has not been immune to these effects, some of which pose new challenges in managing risks which were never before considered in traditional safety management practices.”

 

“ICAO therefore considered it essential to provide new guidance in this area as quickly as possible, so that the countries we support can continue to effectively coordinate, collaborate, and communicate to uphold the highest possible levels of aviation safety while they maintain the continuity of critical operations.”

 

The new ICAO handbook is available compliments of the Organization on the ICAO COVID-19 Safety Risk Management website, which will shortly contain additional links to practical information and tools which States are encouraged to stay actively updated on.

 

ICAO will be hosting a free ICAOTV interactive webinar to introduce the new handbook, on 14 May.

 

Source: https://www.icao.int/Newsroom/Pages/ICAO-issues-new-guidance-on-COVID-19-aviation-safety-risks-.aspx

 

The Covid-19 pandemic has exposed the weak points of global airlines, which are now struggling to stay afloat. Airlines such as Kenya airways, which were already in financial mess, have seen their situations worsen as the virus scourge continues to wreak havoc to key sectors of local and global economy.

KQ has now realised that its overreliance on passenger services is its undoing. The national carrier has thus been compelled to think harder to broaden its revenue streams in a bid to cushion itself against such global crises as the current Coronavirus.

The airline is already planning to diversify 40 percent of its business to other revenue streams and cut overreliance on passenger services, which forms the bulk of its revenue.

At the moment, 90 percent of the Kenya Airways revenue comes from passenger services with a paltry 10 percent from cargo.

KQ chief executive officer Allan Kilavuka says the carrier has been heavily reliant on passengers but it’s now time they diversified their business, having learned from the Coronavirus havoc.

“We have been heavily reliant on passengers but we now need to spread out our business. We are working on how to diversify to other revenue streams,” said Mr Kilavuka.

Source: https://www.nation.co.ke/business/KQ-pays-the-price-for-heavy-reliance-on-passenger-revenue/996-5544142-10hj5xyz/index.html

 

Tourism & Wildlife Cabinet Secretary, Hon. Najib Balala, hosted a stakeholder webinar, to lay out the ground-work for the sector’s recovery.

Speaking during the webinar, Balala singled out the domestic and regional tourism as the key to the sector’s immediate recovery:

“The international market will take a while to recover and we should therefore bank on the domestic and regional travelers. However, affordability and accessibility will play a vital role in this”, he noted. His sentiments were supported by Damian Cook, Founder & CEO E-Tourism Frontiers, and a leading international tourism consultant: “We need to take stock of Kenyan products, see what is going to work during recovery and capitalize on them”, he said. The webinar, under the banner ‘Leap Forward’ brought together over 500 stakeholders to listen and interact with 6 local and international tourism experts who made compelling presentations on the way forward for Kenyan tourism:

• Damian Cook : Founder & CEO, E-Tourism Frontiers
• Chad Shiver : Destination Marketing Head for Africa, Trip Advisor
• Alexandra Blanchard : Destination Sales Manager – EMEA, Trip Advisor
• Ninan Chacko : Senior Advisor, McKinsey & Company
• Hugo Espirito Santos : Partner, McKinsey & Company
• Karim Wissanji : Founder & CEO, Elewana Group
• Maggie Ireri : CEO, TIFA Research Limited
• Joanne Mwangi-Yelbert : CEO, PMS Group.

Data presented by TripAdvisor’s Destination Marketing Head for Africa indicated that in terms of recovery, Africa leads in the number of respondents (97%) ready to take short domestic trips within six (6) months of the end of COVID-19. The data also indicated that most travelers were seeking road trips and beach experiences, because of concerns about boarding planes and the need to unwind, respectively, post-COVID 19.

This data further supported CS Balala’s call for a focus on domestic and regional tourism. Ninan Chacko of McKinsey, called for re-imagination and reform of Kenya’s tourism to have a more diversified tourism product that offers options and more value to travelers. He gave the example of Tourism Australia and said that in tandem with the focus on domestic and regional tourism, Kenya could position itself as the hub for East African tourism given its national carrier’s network and resilience and its developed tourism infrastructure.

Hugo Espirito-Santos, of McKinsey further noted that one of the ways to re-imagine and reform the tourism product would be by focusing on experiential tourism – giving tourists a better experience by reducing density in tourism sites such as the Maasai Mara and laying out strategies that take into consideration geography, consumer segments and culture and food experiences.

Damian Cook of E-Tourism Frontiers, gave an elaborate strategy centered on react, rethink, and recovery to get the sector back on its feet and called for all players to develop a new paradigm for their businesses noting that the post-COVID-19 world will bring changes on the scale of 9-11 in 2001. This he said would include bilateral tourism agreements and COVID-free certifications for countries.

Maggie Ireri, of TIFA Research Limited, took participants through the results of an online poll which gave them an indication of the tourism stakeholders’ pain-points. Pain-points which had earlier been brought to the CS’s attention by the sector and he has already presented them to the National Treasury for consideration.

CS Balala laid out the six-point agenda his Ministry is pursuing for the sector, that employs over 1.6 million Kenyans and represents 20% of the country’s GDP:

1. Creation of a Tourism Recovery Revolving Fund
2. Deferring of Tax and Reduction of Input Costs and Fees
3. Incentives for Tourism Sector Investors
4. Enhanced Domestic Tourism Marketing Budget
5. Better support and coordination with the aviation sector
6. Primacy and investment in Conservation & Wildlife as the backbone

“My key points as I close this webinar are that we have to restart and reset the industry from a new slate going forward. We need to utilize the ever-evolving digital world, step up conservation and re-invigorate wildlife product, advocate for legislation and re-look at the aviation and travel sector.” ~ CS Balala

 Source: https://www.goplacesdigital.com/domestic-tourism-to-take-centre-stage-post-covid-19/?utm_source=rss&utm_medium=rss&utm_campaign=domestic-tourism-to-take-centre-stage-post-covid-19

The Kenya Association of Travel Agents (KATA) and various other associations under the umbrella body Kenya Tourism Federation (KTF) came together through a webinar to discuss measures of business survival during and after the COVID-19 crisis.

The associations explored the continuous devastating impact on the industry in finance, human resource and business continuity and ways of emerging from the crisis stronger.

KTF Chairman Mr. Mohammed Hersi noted that the longer the disease lasts, the longer it will take to revive the industry and the economy at large.

Chief Administrative Secretary (CAS) for Tourism and Wildlife Mr. Joseph Boinett, who was also in attendance, urged the travel and tourism industry players to pull together as the world seeks ways of getting rid of the highly contagious virus. “The post COVID-19 world will be new and different,” he pointed out.

KATA Chief Executive Officer Ms. Agnes Mucuha pointed out that the travel trade is hedged on transport and for it to thrive, international borders need to open up.

This, she further said, is the reason why the aviation and travel industry has a bleak future as no revenue is streaming in.

Since the first case was reported in March, several measures have been put in place by the government to contain the spread of the highly contagious disease.

Among them is social distancing, restricted movements amongst counties, a dusk to dawn curfew and no flights in and out of the country, measures that have been extended for another 21 days.

These measures though very necessary in preventing the rapid spread of the virus have affected businesses through loss of sales and revenue. This has led to some companies having to reduce the number of staff and even closing down.

“Some airlines like South African Airlines and Air Australia are going through insolvency. If airlines do not receive support from their governments, they will go bankrupt,” Ms. Mucuha said.

She called upon government and corporates to pay up pending funds owed to travel agents to allow their businesses to survive the crisis.

“There are some companies that will not survive the Coronavirus pandemic. The government needs to support these businesses. Instead of closing shop, these businesses can partner for survival and later make a comeback post COVID-19, “she advised.

Travel agents, she continued, may have to rethink their business strategy and cease extending credit in future for business sustainability.

On human resource matters, the Kenya Association of Hotel Keepers and Caterers (KAHC) CEO Mr Mike Macharia talked about the options businesses have with their staff which are within the law. These include paid and unpaid leaves, and pay reductions, all of which, he emphasised, have to be agreed on by the employer and employee.

Jambojet has a new Managing Director, Mr Karanja Ndegwa, who is also the airline’s Chief Financial Officer.

He takes over in an acting capacity from Mr. Allan Kilavuka who was appointed Kenya Airways Chief Executive Officer and Managing Director in February this year.

Jambojet Board of Directors announced on Monday that Mr. Ndegwa will take up the role from Friday April 30, 2020.

Jambojet Board Chairman Mr. Vincent Rague thanked Mr Kilavuka for his dedication in serving the local airline as he welcomed Ndegwa into his new role.

The Kenya Association of Travel Agents congratulated Mr Ndegwa and wished him success especially now that the travel and aviation industry is grappling with the effects of the highly contagious COVID-19.

“His appointment is a clear indication of the confidence that the Jambojet leadership and the whole travel industry has in him. This stamps his exemplary service to the airline over the years. KATA will continue to support the new leadership and we are confident the partnership that has existed between our two organisations will continue to thrive as we strive to boost the growth of travel in Kenya”, KATA Chairman Mr Mohammed Wanyoike said.

Mr. Ndegwa is a graduate of Economics and Statistics from the University of Nairobi and also a Certified Public Accountant. He has over 20 years in experience in the aviation industry, 12 of which have been in leadership roles.

Before joining Jambojet in 2014, he worked at Kenya Airways in various positions.

Meanwhile, due to the extension on cessation of movement by the government for the next 21 days in and out o Nairobi, Mombasa, Kilifi and Kwale Counties, Jambojet has temporarily suspended its operations until May 20, 2020.

The local carrier encouraged its passengers who have booked travel within the suspension period to reschedule their travel at a later date at no cost adding that the ticket value remains for a period of one year from May 1, 2020.