The country’s aviation industry is expected to lose about K1.5 billion between January and June this year in the wake of Covid-19, the Ministry of Finance has said.
The development comes as the industry in Africa is expected to experience a 40 percent drop in passenger traffic translating to revenue reduction of over US$ 4 billion.
In its Annual Economic Report, Treasury says several companies operating in the sector are already facing financial challenges which have resulted in the laying off of some staff.
“These companies include travel agencies and air services providers. Companies operating at the airport are also not exempted with both Lilongwe Handling Company and Airports Development Limited requesting for a bail out from the government,” the report says.
International flights into and out of Malawi were halted on April 1 as a measure of combating the spread of the pandemic.
According to Treasury, the sub-sector performed moderately well in 2019 as cargo tonnage recorded a four percent increase when compared to 2018 with 6,092 tonnes carried by air.
Treasury says imports continued to dominate, accounting for 92 percent of all cargo transported by air.
“On the other hand, passenger traffic recorded an 18 percent drop when compared to 2018 with 363,500 passengers using the two primary international airports. The underperformance can in part be attributed to the resurfacing of the runway at Chileka International Airport which took place from March to December, 2019 and limited the number of air services into Blantyre.
“The cargo and passenger traffic figures translate into a two percent increase in revenue collection for the sub-sector with revenues in 2019 amounting to K4.397 billion against K4.304 billion in 2018,” Treasury says.