Middle East aviation

Covid-19 now threatens more than 818,900 jobs in Middle Eastern aviation industry. Credit: Jag_cz / Shutterstock.

Airlines in the Middle East have lost $7.2bn in revenue since 11 March as the Covid-19 pandemic leads to flight cancellations and travel bans, the International Air Transport Association (IATA) said.

The pandemic now threatens more than 818,900 aviation industry jobs in the Middle East.

IATA’s regional vice-president for Africa and the Middle East, Muhammad al-Bakri, said cost-cutting measures being implemented by regional airlines would not be enough to offset the revenue losses caused by flight bans and travel restrictions.

Al-Bakri told MEED that jet fuel cost reductions – a likelihood amid the ongoing oil price war between Opec producers and Russia – would also not ‘come close’ to offsetting ongoing revenue losses as thousands of flights are grounded in the region.

Since the end of January, 16,000 passenger flights have been cancelled in the Middle East, according to IATA.

Regional airlines are further threatened by low levels of cash reserves, which cover approximately two months.

International bookings in the Middle East are down 40% year-on-year in March and April, and by 30% year-over-year in May and June.

Multibillion-dollar cuts for aviation in the Middle East

Airline revenue losses in the six GCC states, plus Lebanon, Egypt, Jordan, Morocco and Tunisia, are expected to total about $10.4bn, according to Iata’s estimates of the Covid-19’s extensive spread.

Saudi Arabia, the UAE and Egypt would be among the worst-hit markets if disruptions continue or worsen. The kingdom could suffer a loss of 15.7 million in passenger volumes and $3.1bn in revenues, threatening 140,300 jobs in the country.

In the UAE, Covid-19 disruptions could could result in 13.6 million loss in passenger volumes and a $2.8bn loss in base revenues. More than 163,000 jobs stand at risk.

Covid-19 could result in a 6.3 million loss in passenger volumes and $1bn lost in base revenues in Egypt. The disruptions to air travel could also put at risk about 138,000 jobs in the country.

Within the GCC, Qatar could lose $746m in base revenues and 2.3 million in passenger volumes if Covid-19 disruptions continue.

Persistent disruptions could also drive revenue cuts of $204m in Bahrain, $547m in Kuwait and $328m in Oman.

Globally, the aviation industry could require aid of up to $200bn to contend with the effects of Covid-19.

Al-Bakri said regional airlines ‘are facing a liquidity and existential crisis’, adding that IATA was calling for direct financial support for carriers, loans and corporate finance support and tax reliefs to support the aviation sector’s post-pandemic recovery.

“Several governments in Africa and the Middle East have already committed national aid for Covid-19,” Al-Bakri added.

“Our ask is that airlines, which are essential to all modern economies, are given urgent consideration. This will help keep them alive and ensure airline staff – and people working in allied sectors – have jobs to come back at the end of the crisis.”

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.

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