@Aviator. Before investing in KQ, listen to this webinar on future of Aviation in Africa

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Okiya

Elder Lister
cc @Aviator

@everyone else, there are very many great webinars especially on LinkedIn you can learn a thing or two. It's better than the finishing bundles on 1 month free pornhub subscription cc @Cortedivoire

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Future of Aviation in Africa - Will it survive COVID-19? by Invest Africa Insights • A podcast on Anchor

In light of announcements from Virgin Australia and Air Mauritius, Invest Africa Insights held an extended webinar on the COVID-19 crisis and how it will impact the aviation sector in Africa. Panellists discussed the future for the African Continental Free Trade Agreement, whether countries...
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The summary:

  • The whole industry in lockdown and we have never seen global aviation stop, just cargo and emergencies. Airlines, can’t use 9/11 and SARS as an indication, but 9/11 resulted in 40% of business loss which took almost 5 years to recover from.

  • 40% of the global commercial aircraft grounded may not fly ever again. When SAA resumes after Coronavirus, it may only operate at 3% of its previous capacity flying 5 routes with 3 planes, down from 3,000 flights and 55 routes.

  • Rethink business models: Rethink networks, rationalize fleets, and operate small capacity aircraft. When travel resumes it’s unlikely that will require large aircraft. There may be just 3-4 business class passengers on some routes and while people may increase travel over 12-24 months, the global shutdown has made them realize that virtual meetings work, and there is less need to travel.

  • There’s too much capacity and, with 200 airlines, too many players in Africa aviation. It will be survival of the fittest.

  • Airlines usually have 2 months of cash on hand, but with no planes in the sky, they are engaging in cash conservation in the short-run and finding alternative fundraising to be sustainable in the long run.

  • While airlines are in discussions with their governments, countries have other many priorities now, like health and hospitals, and there will be no more free money from governments for airlines.

  • Instead, airlines need to work with each other – airlines, airport, MRO, manufacturers etc. Airlines don’t have the balance sheets that airports do and consolidation will be essential because of reduced demand across the board and excess capacity.

  • What makes a bankable airline for investors? Airlines all have the same overheads – and it is not necessary every airline to duplicate these. A 5-star hotel operates 5 restaurants using one kitchen. African airlines should restructure and have one centre of excellence for MRO (maintenance, repair, and operations), pilot training, finances, back-office structures.

  • The productivity of staff and assets need to improve significantly – use fewer resources to do more work – but airlines have to balance that with an even smaller and health-conscious travelling public (crew and passengers) and extra costs of cleaning aircraft that are unbearable. Alongside that, skills are abundant as Covid has placed pilots and engineers on furlough and retrenchment.

  • But the challenge with cooperation and consolidation are different laws, regulation, politics, and bilateral agreements in every country.
 
Mzito Warren Buffet has sold all his shares in the 4 major US airlines. Its true airline industry will never be the same again
 
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