African Airlines Survive Covid-19
Since the pandemic started, there has been border closures, quarantines and lockdowns. These strict measures to fight the pandemic nearly brought domestic and international travels to a standstill in 2020. But despite the economic pressures felt by African airlines, there was a resolve for survival. Ethiopian airlines, Africa’s largest commercial airline, quickly diversified to cargo. It avoided seeking bailouts and layingoff full-time employees. In Northern Africa, Air Maroc offered free insurance packages to woe customers back into flight.
Passenger traffic for air transport dropped at the peak of the Covid-19 pandemic in 2020. The International Air Transport Association said traffic in Africa fell by 89 percent. Nevertheless, in spite of this drastic fall, carriers on the continent made tremendous strides to survive. Africa’s leading carrier, Ethiopian Airlines, managed to close the year with profits of around 2.85 billion euros at the end of June. It’s still a shortfall compared to the forecast of over 3 billion euros.
The damage was largely salvaged as the airline transformed part of its passenger fleet into freight to compensate for the sudden drop in passenger traffic, coupled with a drastic cost-cutting policy.
The Moroccan national carrier devised innovative ways to stay afloat as it was also hard hit by the global health crisis. Royal Air Maroc offered its customers free insurance with the purchase of a ticket, assuming the coverage of medical expenses of up to 150,000 euros in the event of coronavirus infections contracted during an international trip between December 1, 2020 to May 31, 2021.
Elsewhere on the continent, Ghana and Burundi announced intentions to create new national carriers. In October 2020, Ghana signed a memorandum of understanding with Egyptair for a future national carrier. No date has been set for an official launch. Bujumbura set 2021 for the rebirth of a state-owned airline, more than a decade since Air Burundi filed for bankruptcy.
Johannesburg-based aviation expert, Phuthego Mojapele said, “The aviation industry in Africa has really seen a turbulent time like any other countries or continents around the world. And I think Africa was not spared. But if you look at how we have done things in Africa; in trying to keep our planes in the skies and making sure that we connect Africa that has always been difficult to do. We have managed to do that very well through Ethiopian Airlines that we know very well that they are doing fantastically well.”
In the east of Cameroon, a cooperative is rallying women to see subsistence farming as an alternative source of livelihood. The village of Gbanam is predominantly a mining community. Thanks to a pilot project run by an NGO, these women can now look forward to accumulating resources for future use. It’s an activity they have not been economically empowered enough to do for years. “Initially, we were all in the mining business before Foder came to us with alternatives. I realized that the idea of joining together in a cooperative to carry out alternative activities is important for the family. Because you can have gold, and even silver, but you don’t have anything to eat or to purchase goods,’’ said Marguerite Diza, President of the dynamic women of Gbanam. The project is run by a nongovernmental organization, Foder.
“The women of Gbanam have been strongly mobilized through our sensitization. With the support of the chief, we helped them organize themselves into a mining cooperative. We supported them to set up agriculture, particularly with plantain trees and cassava cultivation,’’ said Justin Landry Chekoua, Promess Foder Project Manager. The pilot project has proved successful according to the NGO. It has brought badly needed relief to locals and Foder aims to replicate the project in surrounding communities. Nigeria has become the second-largest bitcoin market in the world after the United States. That’s according to Paxful, a leading bitcoin trading platform. Nigerians often get restricted on global platforms like PayPal. However, Paypal doesn’t allow payments to the country. That, among other reasons maybe why Nigerians are opting to trade, buy or sell using blockchain technology. Kenya came in at number 8 with South Africa placing 10th of the world’s top bitcoin markets.
In the last five years, Nigeria has traded over 60,000 bitcoins valued at more than $560 million. Why has the cryptocurrency become so popular? Transactions are stored in a database called blockchain- meaning they can happen anywhere in the world. Another reason is it cuts out banks and the middle man. This was useful during the police brutality protests in Nigeria in October 2020 when protesters could not use local payment platforms to collect donations, and so they switched to bitcoin.
Lastly, bitcoin can also be cheaper as banks and international platforms can charge high fees for transactions. And if currencies are unstable or inflation is high, then people may prefer to switch to crypto which is not regulated by the government. Cryptocurrencies are expected to get even more popular on the continent especially with the growing generation of young entrepreneurs.