Challenges continue to confront the aviation industry in Africa, Chris Zweigenthal, CEO of the Airlines Association of Southern Africa (AASA), said on Wednesday.
He addressed the 27th African Aviation Summit, Air Finance Africa 2018.
“There has certainly been significant movement forward in airline business development, in the regulatory arena and with infrastructure development,” he told delegates.
“I am an eternal optimist and am convinced African aviation will successfully tackle its difficulties and take its rightful place on the global aviation stage.”
Africa holds around a 3% share of the global air transport market.
“Considering Africa is home to 15% of the world‘s population and makes up 20% of the earth’s landmass, this tells us Africa represents immense potential for commercial airlines,” he said.
The International Air Transport Association (IATA) predicts that air passenger activity will double by 2035. Africa’s growth of 5.4% per annum is expected to outstrip the global average of less than 5% per annum over this period. Zweigenthal believes this is a conservative forecast for the continent.
Statistically, the track record for Africa’s airlines over the past 30 years reflects its precarious nature, according to Zweigenthal. Almost 150 airlines ceased operations; 35 would-be airlines did not achieve start-up; there are currently 52 airlines preparing to start-up; 283 African airlines currently operate; and 32 African airlines have suspended operations.
“These statistics include what is a relatively large number of public and privately-owned passenger and cargo operators competing with each other and carriers from further afield, in a relatively small market,” said Zweigenthal.
He said many African airlines are battling to survive and achieve profitability.
“The new teams managing the likes of SAA, Kenya Airways, Air Namibia and SA Express, are fixed on the task at hand. Speaking for the industry association representing the majority of Southern Africa’s airlines, it is not my place to judge the commercial, financial or governance merits and corporate processes which are often the topic of public scrutiny and debate,” said Zweigenthal.
“Instead, we play a constructive role, offer support and doing what we can within our mandate and sphere of influence, to lay the ground for a sustainable Southern African airline industry moving forward.”
He said that, although one is continually reminded of the tribulations experienced by some airlines, one should not lose sight of the fact that there are also some strong performers in the sub-Saharan region, such as Comair, Safair, Mango, Airlink and Ethiopian Airlines.
“With agility, creativity and innovation those airlines currently wrestling to overcome the threats to their existence will also take their place amongst the continent’s successful carriers,” he said.
Travel and tourism
Travel and Tourism, for leisure and business, is the fastest growing sector in the world and represents one of the largest growth opportunities in Africa, according to Zweigenthal.
At the recent Africa Tourism Indaba in Durban, Tourism Minister Derek Hanekom noted that tourism has been designated as one of SA’s three priority industries. Around 62 million people visited Africa in 2017, which is 8% more than in 2018.
To take full advantage of the opportunity offered by the tourism industry, certain inhibitors must first be removed, in his view. These include artificial barriers to market access; connectivity; investment; and high costs associated with travel.
“Many of us, who have the best interests of African aviation at heart, will reflect on the arduous 30-year struggle to relax, if not remove entirely, those barriers, which do not just stunt airline business, but economic activity, growth and social development in their broadest sense in Africa,” said Zweigenthal.
The third instalment, the launch of the Single African Air Transport Market (SAATM) – which follows the original 1988 Yamoussoukro Declaration (YD) and the subsequent Yamoussoukro Decision of 1999 – is a work in progress with the African Union (AU) convening many meetings and workshops to deal with regulatory and implementing instruments that need to be put in place.
To date 30 of Africa’s 54 nations have signalled their commitment to the process. While there is a programme, a definitive timeline for its full implementation must still be tabled.
“This does not imply the AU’s member states and their airlines are standing still. Given the delays in realising a new multilateral framework through YD or SAATM, bilateral ‘YD agreements‘ are being signed between states. Previously constrained routes are being opened up,” said Zweigenthal.
An example is the revamped bilateral between South Africa and Nigeria, which now allows for an unlimited number of flights between the two countries.
“The barriers or inhibitors are not as large as perceived, and we are working with our transport and tourism colleagues to formulate measures to address them and exploit the many opportunities they would create,” he said.
“In addition, significant infrastructure development is taking place within Africa, including the construction of new airports and the upgrading and development of air traffic services.”
It is important to have an alignment of purpose, which provides a further opportunity for growth and sustainability, in his view.
“Clearly, another big opportunity exists for us to embrace what is happening globally, to innovate and to adapt according to our customers’ needs,” said Zweigenthal.
* Sign up to Fin24‘s top news in your inbox: