For many years, Africa has been talked of as a continent of great potential in commercial aviation. That potential has never really materialised. As Alan Dron reports, the authors of a new book believe that, at last, things are about to change.
By most criteria, Africa should have a thriving commercial aviation sector. With a population of more than 1 billion, 54 nations, long distances to cover between points on the continent and a growing middle class, for many years commentators have predicted that the continent is about to ‘take off’ in aviation terms. Yet it has not happened. Why?
In their new book, Fly Africa, Eric Kacou and Hassan El-Houry set out the problems that have for so long prevented the continent from taking its rightful place in the commercial aviation landscape. But the authors believe that – at last – Africa is on the verge of breaking the bonds that have shackled airlines there.
First, a few statistics: Africans make up 12% of the world’s population, but only 3% of the world’s airline passengers. The continent has (at the time when Fly Africa was written) 731 airports and 419 airlines, but very few successful ones.
Widespread poverty on the continent has, of course, been a major hindrance in aircraft becoming the everyday mode of transport that they are in North America, Europe, Asia-Pacific and, increasingly, the Middle East.
But Africa is becoming richer. The authors calculate that around 34% of Africa’s 1.1 billion inhabitants can now be classified as middle-class.
In 1970, there were five million passengers in Africa. By 2015, that number had breached the 100 million barrier and is continuing to climb.
Kacou and El-Houry give four major reasons for African aviation not having grown more quickly:
- Poor connectivity;
- High ticket prices;
- A market dominated by non-African airlines; and
- Large variations in the quality of Africa’s aviation infrastructure.
Those factors tend to reinforce each other. Let’s take them one by one.
The problem of connectivity has long been a problem in Africa. Many countries still only allow foreign visitors to enter if they have acquired a visa before they arrive. As many African nations do not have embassies or consulates in every country on the continent, this often means that a passenger wanting to travel from country A to country B initially has to travel to country C, simply to get a visa from country B’s nearest diplomatic mission. This makes it considerably more difficult to fly where you want, when you want, in Africa.
A further connectivity problem is that African airports serve far fewer destinations than their counterparts in Asia-Pacific, North America or Europe. This has led to the longstanding and somewhat ridiculous situation of often having to connect between two African cities via distant European hubs.
With high ticket prices, there has been a tendency for people in Africa to see airlines as being ‘for the rich’ and for many governments to follow that line of thinking by milking them with heavy charges and taxes. It is not unusual, for example, note the authors, for departure taxes from African airports to reach $100.
That pushes up the price of tickets and takes them out of the reach of many. Those people who can afford them typically pay much more flying within Africa than passengers travelling in other continents.
Kacou, co-founder and CEO of advisory and investment company Entrepreneurial Solutions Partners, and El-Houry, group CEO of Kuwait’s National Aviation Services, calculate, for example, that “one dollar spent in economy class in Africa enables passengers to travel 6.04km. The same dollar spent in Europe propels passengers an average of 44.44km.”
The problem of non-African airlines siphoning off traffic that African flag-carriers should be carrying has become noticeably worse over the past decade, as Emirates, Etihad, Qatar Airways and Turkish Airlines have increasingly pushed into Africa, deploying their rapidly growing fleets to funnel African passengers through their hubs and on to their final destinations. Indeed, Turkish is on record as saying that its ambition is to become Africa’s largest carrier.
Few African carriers have the strength to compete with these giants. The exception, say the authors, is Ethiopian Airlines, whose management, together with the country’s government, have shown “consistency, commitment and foresight” in promoting aviation in their country. Critically, the Ethiopian Government has resisted to the temptation to interfere in the airline’s affairs, but supports it by providing essential infrastructure – for example, in the form of a new, $3 billion airport that will have an eventual capacity of 70 million passengers annually.
Other factors in Ethiopian’s favour are good relationships between management and workers; a more balanced route network, which earns just one-third of its revenue from Africa, yet has a 15-point domestic route network; and strong relationships with other African nations, including investments in other carriers.
Apart from Ethiopian, Kacou and El-Houry believe that Royal Air Maroc, RwandAir and Air Cote d’Ivoire show real potential. Three better-known names – EgyptAir, Kenya Airways and South African Airways – face a more uncertain future, they believe.
The factor of highly variable infrastructure standards in Africa can be demonstrated in a single statistic: an astonishing 36% of all Africa’s international traffic passes through just three hubs – Addis Ababa, Johannesburg and Nairobi, home to Ethiopian Airlines, Kenya Airways and South African Airways respectively.
Even modest investments in aviation infrastructure can bring major benefits: for example, the lack of a $500,000 X-ray machine at Malawi’s Lilongwe Airport effectively blocked the export of millions of dollars-worth of agricultural produce.
The authors make the point that transport infrastructure does not, in itself, create jobs, but is an essential pre-condition for the successful growth of aviation as a whole. And aviation does produce jobs, not only directly in airlines and at airports, but in the huge network of companies that provide the essential support for them.
Backing this up, the International Air Transport Association (IATA) says that investing in airlines brings a return on investment (ROI) of 4%; investing in aviation support service companies may be less glamorous, but they reliably provide an ROI of 10-40%.
Kacou and El-Houry end their investigation with some conclusions.
Aviation, they say, can play a huge role in advancing Africa’s future; the first countries to consistently support low-cost carriers (which, with a couple of notable exceptions, such as South Africa’s Mango and Fly Kulula in South Africa have tended to struggle in Africa) will reap the benefits. Low-cost carriers have successfully ‘expanded the pie’ in regions around the world by bringing flying within the cost range of many more people, getting them into the habit of flying.
Governments, say the authors, must liberalise their economic regimes and not subsidise national carriers that are clearly failing. Nor, they add, should they try to protect those companies by being obstructive to carriers from other nations.
Private capital also has a vital role to play, by providing investments that may be beyond the means of cash-strapped governments.
And countries need to recognise that creating or expanding a successful aviation sector requires coordination between many industries. A prime example of this can be found in Dubai, where a supportive government has coordinated the growth of aviation infrastructure and a wide range of companies that, together, make up an aviation eco-system.
On the African stage, the Rwandan Government sees aviation as increasing both trade and tourism and, like Ethiopia, is creating a new national airport to support this growth.
Africa is on the verge of an aviation breakthrough, say the authors, but the sector on the continent needs governments and private enterprise to create the right conditions for it to flourish. (africanaerospace)