As African economies gain momentum, air travel is booming
The emergence of new airlines, as well as a diversifying of intra-African routes, is beginning to make itself felt
African skies are becoming busier as new airlines take to the air, meeting a growing need for safe, reliable travel.
For years African travellers have relied on a handful of local airlines and more often, international carriers from Europe and even the UAE. So much so that it became common for passengers flying between African cities – even within the same country, to go via Dubai or London.
To do otherwise was to risk flying on aircraft of uncertain provenance, often under the command of bleary-eyed pilots. Many companies still forbid their staff and executives to travel across Africa on anything but an authorised list of airlines.
As a result, a business traveller flying from Lagos in Nigeria to Accra in Ghana - a mere 460km - may well go via London on British Airways, or stop over in Abu Dhabi on Etihad.
"It’s certainly still challenging to get around Africa," says Mory Camara, international account manager- Europe-Middle East & Africa at OAG, a digital flight data platform that assists airlines in scheduling. "But there has been some improvement in recent years and the need to travel to the UAE or some European city to connect isn’t quite as strong as it used to be."
The emergence of new airlines, as well as a diversifying of intra-African routes, is beginning to make itself felt. Uganda Airways is the latest, having agreed to acquire four Canadian Bombardier CRJ900 aircraft and two Airbus A330-800neo last month, which will form the basis of its fleet. Uganda is also the first African customer to acquire the Airbus Neo.
The Democratic Republic of Congo has also just re-invigorated itself after being dormant for years. It, too, has two Bombardiers and two Airbuses, and began flights in June. Congo Air has two A320 aircraft it uses to service internal destinations. Its only international stop as yet is a regular flight between the capital Kinshasa and Johannesburg, South Africa.
Nigeria and Tanzania also have plans to create national airlines, with the aim of capturing regional and international travellers. To do so they have to adhere to global standards protocols, says Mr Camara.
"The quality of African airlines has improved considerably in recent years and the use of new aircraft is just a part of that; remember Ethiopian Airlines was the launch customer of the Boeing 787 some years back, and they have done a tremendous job in building on that reputation."
Already more than 100 airlines operate across Africa, with more on the way. “The International Air Transport Association [Iata] has identified that the top 10 fastest growing aviation economies over the next 20 years will all be in Africa," says Tim Harris, CEO of Wesgro, the development agency of the Western Cape Province in South Africa. "Better air connectivity has boosted trade in goods and services as well as tourism."
Iata forecasts that passenger numbers in Africa will grow by 5.9 per cent per year. By 2036 it will see an extra 274 million passengers a year for a total market of 400 million passengers.
Many of the fastest-growing markets are achieving a compound growth rate of more than 7.2 per cent per year, meaning their market will double in size each decade. Most of these markets are in Africa, including: Sierra Leone, Benin, Mali, Rwanda, Togo, Uganda, Zambia, Senegal, Ethiopia, Ivory Coast, Tanzania, Malawi, Chad, Gambia and Mozambique, according to Iata.
In the past year Cape Town airport has seen a 20 per cent growth in international terminal passengers. This has added 4 billion rand (Dh1.1bn) in direct tourism spending to the economy of the Western Cape, Wesgro figures show. The airport itself has secured 13 new routes and 17 route expansions, adding over 1.5 million two-way seats. One of the latest is RwandAir, which has begun direct flights between Rwanda's capital Kigali and Cape Town.
The increase in national airlines across Africa, however, goes against the international trend towards private ownership. The success of Ethiopian Airlines especially may have beguiled some African countries into believing they, too, can run a profitable carrier, says Joachim Vermooten, a Pretoria-based aviation economist. "Most airlines with national characteristics are no longer fully state-owned. Overall the financial success of Ethiopian Airlines is counterbalanced by many unsuccessful African state-owned airlines."
Few operators embody this risk more than South African Airways (SAA). The airline is drowning in debt and will need at least 21bn rand in fresh capital – from its shareholder the state – if it is to survive, Mr Vermooten says.
SAA has been beset by boardroom battles, corruption allegations and servicing of unprofitable routes. The airline has now started cutting routes and grounding aircraft. It has even entered talks with other airlines about leasing out its cabin staff and air crew.
Still, SAA is unlikely to be grounded anytime soon, as long as the state keeps shovelling money its way. This in turn creates another problem. The proliferation of government funded airlines makes it harder for the private sector to compete.
Mr Vermooten says state-carriers distort market forces, keeping out private operators. They even threaten the existence of other state airlines. Worse, countries may find themselves diverting scarce resources to keep their airlines afloat, as South Africa is doing with SAA now.
"Capacity wars between state-owned airlines then result in a subsidy race between states, which in turn decimate national treasuries," he says.
Elsewhere, regulations help keep capacity wars at a minimum, such as the State Aid rules in the EU, which has the authority to adjudicate disputes and even issue fines within the bloc.
African airlines are aware of the danger of unregulated competition. That is why in January this year 23 African countries signed the Single African Air Transport Market (SAATM), an initiative by the African Union, which consists of all 55 countries on the African continent.
The SAATM, it is hoped, will help airlines grow and regulate competition to avoid ruinous air trade battles between countries.
Mr Camera says, over time, Africa may be better served by five or six airlines, rather than the 100-plus flying now. Realistically though, the trend of adding national carriers to the continental fleet is likely to continue.
"In the short term we may see more airlines emerge as respective countries develop and encourage local airlines, rather than perhaps encouraging established airlines to fly more frequently to their market."
Updated: August 2, 2018 11:26 AM