AFRAA AIR TRANSPORT REPORT 2020 Release date: May 2021 GLOBAL AIRLINE INDUSTRY PERFORMANCE The Covid 19 pandemic hit the air transport sector hard in 2020. All regions have experienced a drasc drop in traffic due to border closures and travel restricons. Both capacity and traffic dropped globally: ASKs and RPKs declined by 55% and 65% respecvely. From February 2020, air traffic recorded a drop of 31% on the Asian market and 3% on the North American market. In March the traffic is down 45% and more than 95% in April. Traffic TABLE OF CONTENTS resumed significantly from July ll October, but the recovery was hampered by the second wave of infecon during the fourth quarter of the year. Few months aer the traffic restart, some countries imposed new travel bans and borders closing, impacng internaonal Global airline industry performance 3 markets and causing an 11% drop in the traffic. African Airline industry performance 2020 4 Financial performance 4 Global industry ASK and RPK growth Passenger traffic growth 4 % Global ASK growth % Global RPK growth Passenger distribution 5 0% -20 -20 -20 -20 -20 African airlines ranking by traffic y eb-20 8 Jul-20 Jan-20 Jun-20 Oct Apr F Sep-20 Dec-20 Aug-20 Nov Mar Ma -20% Routes ranking by traffic 8 -40% Airport ranking by passengers traffic 10 Airport ranking by freight traffic 10 -60% Airport charges 11 -80% Airport connectivity index 12 -100% African countries connectivity and openness 13 Source: AFRAA /OAG Air cargo was also affected by the Covid situaon. The lockdowns and travel ban affected Annex: glossary 15 belly cargo capacity, leading to an overall yearly drop of 23%, according to IATA. Cargo traffic also declined, affected by the disrupons in manufacturing and trade worldwide. However, the recovery from Q3 led to a 10.6% year-on-year traffic drop, but an improved Cargo load factor since capacity decrease was greater than traffic decline. 3 GLOBAL AIRLINE INDUSTRY PERFORMANCE The Covid 19 pandemic hit the air transport sector hard in 2020. All regions have experienced a drasc drop in traffic due to border closures and travel restricons. Both capacity and traffic dropped globally: ASKs and RPKs declined by 55% and 65% respecvely. From February 2020, air traffic recorded a drop of 31% on the Asian market and 3% on the North American market. In March the traffic is down 45% and more than 95% in April. Traffic TABLE OF CONTENTS resumed significantly from July ll October, but the recovery was hampered by the second wave of infecon during the fourth quarter of the year. Few months aer the traffic restart, some countries imposed new travel bans and borders closing, impacng internaonal Global airline industry performance 3 markets and causing an 11% drop in the traffic. African Airline industry performance 2020 4 Financial performance 4 Global industry ASK and RPK growth Passenger traffic growth 4 % Global ASK growth % Global RPK growth Passenger distribution 5 0% -20 -20 -20 -20 -20 African airlines ranking by traffic y eb-20 8 Jul-20 Jan-20 Jun-20 Oct Apr F Sep-20 Dec-20 Aug-20 Nov Mar Ma -20% Routes ranking by traffic 8 -40% Airport ranking by passengers traffic 10 Airport ranking by freight traffic 10 -60% Airport charges 11 -80% Airport connectivity index 12 -100% African countries connectivity and openness 13 Source: AFRAA /OAG Air cargo was also affected by the Covid situaon. The lockdowns and travel ban affected Annex: glossary 15 belly cargo capacity, leading to an overall yearly drop of 23%, according to IATA. Cargo traffic also declined, affected by the disrupons in manufacturing and trade worldwide. However, the recovery from Q3 led to a 10.6% year-on-year traffic drop, but an improved Cargo load factor since capacity decrease was greater than traffic decline. 3 AFRICAN AIRLINES PERFORMANCE African airlines ASK and RPK growth Africa airlines operaons were severely impacted by the Covid19 crisis. If the first cases on the % ASK growth % RPK growth connent appeared at the end of February in the northern region, the restricve measures 0% -20 -20 -20 -20 -20 -20% y eb-20 started to be applied in March. The impact was drasc for the traffic. Jul-20 Jan-20 Jun-20 Oct Apr F Sep-20 Dec-20 Aug-20 Nov Mar Ma -40% Financial performance -60% -80% The Covid19 crisis had a devastang impact on airlines finance around the world. For African -100% airlines, whose financial situaon was already precarious, the impact was even greater. For the Source: AFRAA /OAG year 2020, the Passenger revenue loss is esmated at USD 10.21 billion. African airlines’ Asks and RPKs followed the same trend as the global industry. From the end of African Airlines' Passenger Revenue Loss March, the majority of carriers grounded their aircra, causing a drasc ASK and RPK drop of 85% and 94% respecvely in April. The reducon in traffic connued unl June, before reversing with the gradual opening of borders. 2 2021 1 2020 2 2020 3 2020 4 2020 1 2021 3 2021 4 2021 Q Q Q Q Q Q Q Q 0 SD Passenger Traffic Distribution -1 -0.61 -2 -1.35 African airlines passenger on U -3 -1.85 The traffic reparon shows that African airlines distribution 2020 -2.72 -2.60 -2.55 Billi -4 -3.41 -3.47 globally carried more domesc traffic in 2020, around 43% of the total traffic compared to. The leading Source: AFRAA /OAG Intra Africa carriers in terms of Domesc traffic are airlines like 19% Quarter 2 and 3 was the most affected, before a smooth recovery on the 4th quarter.According to Safair, Ethiopian Airlines, Mango airlines, and Air Domesc our forecasts, African airlines will connue to lose money in 2021, even if the amount will reduce. Algerie. Those 5 airlines carried 4.8 million passengers 43% We esmate the overall Passenger revenue losses for 2021 at USD 8.35 billion. on domesc routes during the year. Internaonal Interconnental traffic represented 57%, breaking down into 19% of 38% Passenger Traffic Evolution Intra-African and 38% of interconnental passengers. Scheduled passengers carried by African airlines Source: AFRAA /OAG 100 91.9 95.6 s 88.5 African airlines international passenger destinations per quarter in 2020 83.9 er 90 76.6 79.5 80 73.8 Q4 3.7 1.4 1.3 0.90.1 0.2 70 61 63 53.2 56 Domesc 60 Q3 2.3 1.0 1.4 0.7 0.1 50 Intra-africa Million passeng 34.7 Europe 40 Q2 1.5 0.6 0.5 0.3 Middle East 30 20 Q1 7.6 3.5 3.9 2.2 0.8 0.6 10 0 0 5 10 15 Million PAX 20 m.) (es 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: AFRAA /OAG Source: AFRAA / IATA Watts At the connental level, Europe is the first internaonal desnaon of African airlines, The number of scheduled Passengers carried by African Airlines is esmated to drop from 95 represenng 21% and even exceeding Intra African traffic (19%), domesc excluded. Traffic to million in 2019 to 34.7 million in 2020, represenng a year-on-year decline of 63.7%. Middle-East tended to increase, while traffic to Asia reduced due to Covid. 4 5 AFRICAN AIRLINES PERFORMANCE African airlines ASK and RPK growth Africa airlines operaons were severely impacted by the Covid19 crisis. If the first cases on the % ASK growth % RPK growth connent appeared at the end of February in the northern region, the restricve measures 0% -20 -20 -20 -20 -20 -20% y eb-20 started to be applied in March. The impact was drasc for the traffic. Jul-20 Jan-20 Jun-20 Oct Apr F Sep-20 Dec-20 Aug-20 Nov Mar Ma -40% Financial performance -60% -80% The Covid19 crisis had a devastang impact on airlines finance around the world. For African -100% airlines, whose financial situaon was already precarious, the impact was even greater. For the Source: AFRAA /OAG year 2020, the Passenger revenue loss is esmated at USD 10.21 billion. African airlines’ Asks and RPKs followed the same trend as the global industry. From the end of African Airlines' Passenger Revenue Loss March, the majority of carriers grounded their aircra, causing a drasc ASK and RPK drop of 85% and 94% respecvely in April. The reducon in traffic connued unl June, before reversing with the gradual opening of borders. 2 2021 1 2020 2 2020 3 2020 4 2020 1 2021 3 2021 4 2021 Q Q Q Q Q Q Q Q 0 SD Passenger Traffic Distribution -1 -0.61 -2 -1.35 African airlines passenger on U -3 -1.85 The traffic reparon shows that African airlines distribution 2020 -2.72 -2.60 -2.55 Billi -4 -3.41 -3.47 globally carried more domesc traffic in 2020, around 43% of the total traffic compared to. The leading Source: AFRAA /OAG Intra Africa carriers in terms of Domesc traffic are airlines like 19% Quarter 2 and 3 was the most affected, before a smooth recovery on the 4th quarter.According to Safair, Ethiopian Airlines, Mango airlines, and Air Domesc our forecasts, African airlines will connue to lose money in 2021, even if the amount will reduce. Algerie. Those 5 airlines carried 4.8 million passengers 43% We esmate the overall Passenger revenue losses for 2021 at USD 8.35 billion. on domesc routes during the year. Internaonal Interconnental traffic represented 57%, breaking down into 19% of 38% Passenger Traffic Evolution Intra-African and 38% of interconnental passengers.