The Arab Air Carriers’ Organization held its virtual Annual General Meeting today under the chairmanship of Mr. Mohamad A. El-Hout, Director General and Chairman of Middle East Airlines, and Chairman of AACO 53rd AGM, with the participation of Chief Executive Officers of AACO member airlines. Exceptionally this year, due to border restrictions and the difficulty to travel, and for the safety of colleagues at member and partner airlines, AACO industry partners, and partner associations and stakeholders, the AGM was held online in a closed session for AACO member airlines to discuss administrative and financial issues, in addition to the strategy forward to overcome the COVID-19 crisis and its impact on the global air transport industry in general, and AACO member airlines in particular.
AACO 53rd AGM emphasized today that the spread of COVID-19 has triggered the worst economic recession since the “Great Depression”; Meanwhile, many states around the world adopted stringent measures, such as closing borders and restricting travel to curb the spread of the virus. The AGM acknowledged that the recovery of air travel could take up to 7 years to return to 2019 levels and that the duration of the recovery depends on several elements as highlighted below:
1. The time of the availability of a vaccine
2. The speed of the recovery of the economies
3. Governments’ embrace of the value of air travel through adopting harmonized and proportional travel health measures that are based on the risk of the spread of the virus
4. Passenger confidence in the mitigation of COVID-19 exposure in air travel
5. The extent of the use of technology in the travel journey
The AGM also acknowledged results of global scientific research that show that air travel is not a transmitter of the virus, as follows:
1. The overwhelming majority of new COVID 19 cases are locally contracted
2. Only 2.9% of COVID cases were inbound travelers
3. Only 0.0000004% of transmission of the virus happened onboard aircraft
4. 88% of consumers won’t travel if there’s a risk of being quarantined
The AGM also recognized the efforts of AACO member airlines, airlines around the world and a large number of airports in investing in and using technology to achieve safe, seamless & touchless travel, where possible.
As the AGM recognized that AACO member airlines are global airlines reaching most areas of the globe and hence were severely affected by the crisis, and after reiterating that the confidence of consumers in air travel lies at the core of the recovery of air transport and hence at the core of the recovery of economies around the world, AACO 53rd AGM adopted a resolution urging governments around the world to embrace the value of air travel through easing border restrictions based on the air services agreements in place and based on global health guidelines in a harmonized and transparent manner through the following:
1) To follow the global restart guidelines developed and adopted by ICAO’s Council Aviation recovery Taskforce (CART), and their updates, that gathers the World Health Organization, the International Air Transport Association, the Arab Civil Aviation Organization, a number of states and other organizations, and with the support of the Arab Air Carriers’ Organization.
2) To adopt a risk-based global health approach for the restart of air transport that is based on the level of the risk of transmission of the virus in different countries, and apply the EU criteria on “test positivity rate” and “testing rate”, whereby any travel health measures would be based on the level of spread of the virus in the country of origin.
3) With the current availability of COVID-19 tests before and after travel, to remove quarantine measures upon arrival and replace with testing.
4) To adopt COVID-19 Rapid Test, that is being developed, which could be done prior to travel, whereby only who test negative would be given permission to travel.
5) To adopt advanced biometric technologies on security, customs, and passport control points to complement the touchless technology already implemented by most airlines and airports around the world.
AACO 53rd AGM also mandated AACO Secretariat General to continue its support and collaboration with global and regional aviation and health authorities and stakeholders around the world to implement the above-mentioned pillars for the recovery of air transport.
Click here for the full text of AACO 53rd AGM Strategic Resolution.
AACO Secretary General’s Report
AACO Secretary General, Abdul Wahab Teffaha, presented his report to the AGM describing the impact of COVID-19 on the economy, travel and tourism, whereby, economies retracted by 4.4% in terms of GDP, tourism fell by 70%, joblessness reached 346 million, from which 57.1% or 198 million is in Travel and Tourism. Also, 60% of the aircraft of the world have been grounded by last May and last September the percentage was still at 30%. The Secretary General pointed out that airlines are forecasted to lose USD 507 billion in revenues by the end of 2020.
The Secretary General highlighted two scenarios for the recovery period as follows:
1- The first is the best-case scenario, where a vaccine is available by the end of this year, and wide inoculation will take place by the end of 2021. In this case, an economic recovery to pre-crisis levels will likely take place in 2021, but for travel and tourism that will extend to 2024. On the Arab Scene, with the suppressed oil prices, the best-case scenario for the economic recovery may take until 2022.
2- The second scenario is the worst-case one, where a vaccine is delayed, and global inoculation extends until early 2022 or more, coupled with governments carrying on with employing draconian measures, restricting travel and cross-border movement. In that scenario, the global economy will probably go back to 2019 levels later in 2022, but Travel & Tourism may take anywhere from 2025 till 2027. As for the Arab world, the economy may recover in 2023 but with the same recovery profile for the Arab airlines due to their global footprint.
The Secretary General also highlighted that the recovery also depends on how the governments are going to deal with this crisis. The Secretary General mentioned some initiatives that governments could take to speed up the recovery of air transport as follows:
1. Open borders and restore normalcy to Air Travel since it has been proven that vast majority of cases are locally generated and barely any cases have been infected during the travel journey;
2. Governments to provide financial support to the air transport sector, as so far state aid has only covered 26.3% of global airline revenue losses and 11.8% of airline losses in the Arab world.
3. Governments to follow harmoniously the global guidelines formulated by the International Civil Aviation Organization (ICAO); done in cooperation with the International Air Transport Association (IATA), the World Health Organization (WHO), the regional aviation organizations, and other stakeholders including AACO. The Secretary General added that those guidelines must be developed to include categorization of the level of threat and measures of mitigation that correspond to the level of the spread of the virus and also the quick adoption of the Rapid Test to ensure that people can travel again and be able to be recognized as COVID-19 free prior to departure.
4. The last point that the Secretary General put emphasis on was the importance of the wide use of technology and that if governments, airports, and airlines embrace the full power of technology, especially biometrics, the travel experience will become smoother.
Click here for the full speech of AACO Secretary General.
AACO’s Annual Report:
AACO’s Annual Report and the Annual Arab Air Transport Statistics publications were combined this year in one electronic publication that was distributed to AACO member airlines, partner airlines, industry partners, and partner associations, prior to the AGM.
We highlight below some of the data included in AACO’s annual report:
• The global economy is expected to contract by 4.4% in 2020 compared to 2019, this represents a 0.8 percentage points improvement compared to the forecast released in June 2020.
• In the Arab world, the region’s GDP is now forecasted to decline by 5.0% in 2020 when compared to 2019, an upward revision of 0.7 percentage points when compared to the June 2020 forecast.
• Global passenger traffic measured in RPKs and ASKs in 2020 are forecasted to decline by 66% and 54.2% respectively when compared to 2019.
• AACO members passenger traffic measured in RPKs and ASKs in 2020 is forecasted to decline by 70.6% and 63.4% respectively when compared to 2019.
• International tourist arrivals are estimated to drop by 70.0% in 2020 compared to 2019. As for international tourism receipts, a 73.0% decline is estimated in 2020 compared to 2019.
• For the Arab world tourism sector, international tourist arrivals to the region are estimated to drop by 71.1% in 2020 compared to 2019, as for international tourism receipts, a 75.1% decline is estimated in 2020 compared to 2019.
• The total contribution of travel and tourism in global GDP is forecasted to reach around USD 3.4 trillion in 2020, which represents a decline of 62.3% when compared to 2019.
• The total contribution of travel and tourism in the Arab world GDP is forecasted to reach around USD 72 billion in 2020, which represents a decline of 72.9% when compared to 2019.
To view the 2020 annual report of the Arab Air Carriers’ Organization, please click here.
To print the report, please click here.
Closing of AACO 53rd AGM and Venue of next AGM
As the AGM concluded, AACO members thanked the 53rd AGM Chairman, Mr. Mohamad A. El-Hout/ Chairman and Director General of Middle East Airlines, for chairing this virtual AGM, and hoped that by the next AGM the current crisis would’ve subsided and the AGM will be held physically instead of virtually. In that regard, the AGM agreed that the forthcoming 54th AGM in 2021 will be convened in Beirut by kind invitation of Mr. Mohamad A. El-Hout/ Chairman and Director General of Middle East Airlines.