We need to start thinking about aviation beyond just airplanes and airports, but as one of the forces that can transform an economy.
It has has been argued that Africa’s aviation sector is bogged down by intractable challenges such as weak infrastructure, poor connectivity, high ticket prices and low passenger volumes.
This can be attributed to various factors such as a lack of political will, a number of money-losing national carriers monopolising the skies, complex rules and regulations that create high entry barriers, and poor safety and quality standards.
If Africa’s aviation sector is allowed to grow, it will spur wide-ranging economic and social growth. Tourism numbers and hotel occupancy are also generally attributed to flight connectivity. Mauritius, for example, has always been a popular tourist destination. But in September 2002, when Emirates started direct flights to the island, tourist arrivals increased exponentially.
The African skies are largely dominated by international carriers like Emirates, Air France, KLM, Brussels Airlines and British Airways. There are a handful of African carriers: Ethiopian Airlines, Kenya Airways, Royal Air Maroc, South African Airlines, EgyptAir and RwandAir.
Across the globe, on average, low-cost carriers account for about one-quarter of all the flights. In Africa, they do not even reach 10 per cent, which makes ticket prices somewhat prohibitive.
High ticket prices result in a lower number of travellers and connectivity remains poor. For example, there are no direct flights from Nairobi, Kenya, to Nouakchott, Mauritania. One can choose to take Turkish Airlines via Istanbul and arrive there after 16 hours or Royal Air Maroc with a stopover in N’Djamena, Chad, and Casablanca, Morocco, arriving after almost 20 hours.
Africa’s infrastructure is lagging behind the rest of the world. There are, of course, exceptions like in Abidjan (Cote d’Ivoire) and Casablanca.
The Kenya Civil Aviation Authority is considering a freeze on new operators at Nairobi’s Jomo Kenyatta International Airport and Wilson Airport due to pressure on existing infrastructure.
But the biggest challenge facing aviation services in Africa is also its biggest opportunity. From the economic trends, it is clear that a number of mega-cities — cities with over 10 million inhabitants — are going to emerge on the continent as this happens, and as the middle class grows, there is going to be a demand for aviation services.
Poor connectivity is the result of two issues. First, it is about the actual economics of the business. There is a need to have a certain demand between two points for them to justify a route. So far, the level of development that we have in African cities has not created that demand.
I am not just talking about GDP but about political integration. The fragmentation and disparities in Africa create a number of barriers. Some policy decisions that were supposed to make it possible for flying to be easier were adopted in theory, but not implemented.
If the national carrier is not profitable, there is no need for a government to subsidise it. There are a number of countries across the continent that have a vibrant aviation sector.
Drivers
We are also going to have a lot of travel within Africa or even from the West to Africa. The biggest challenge facing the continent is that the aviation sector must mature in such a way that it doesn’t become a hindrance to the economic growth. Instead, it must become one of its drivers.
If we are to consider the success stories across the continent, these countries have put in place governance structures around the aviation sector. If it is an airport authority, they have spun it off from the government, given it a board, given it a CEO and given it autonomy.
If it is a national carrier, they have put in place a proper board of directors. They have not allowed the politics of the country to affect the management of the airline. So, the first thing is the use of governance as a strategy to address these challenges.
The second thing is privatisation: Privatising the airport, the national carrier and service providers. This has been a very successful model across the continent and in fact across the world. It leads to partnerships with companies or entities that are experienced, public-private partnerships, and foreign investors coming into the country, which is always a good thing.
Countries that are doing well in delivering aviation think about their aviation sector as a part of an overall economic strategy.
Looking at Ethiopia, Kenya and Morocco, it is clear that the aviation sector is linked to other sectors that are driving growth. For example, there is a lot going on around tourism, trade and exports.
Aviation can do a lot to boost economic integration. The immense diversity of Africa is both a curse and a blessing. It is a curse because our countries are fragmented. The population of 1.1 billion people is similar to that of India, with the only difference being that India is one country.
If we can get aviation going, we can start seeing more integration. So, the Single African Air Transport Market is a step in the right direction.
European carriers like Air France, KLM and Lufthansa, as well as Emirates from Dubai, are extending their reach to African destinations. Greater access to the African skies means a bigger potential market to tap into.
Since aviation is a capital-intensive industry, a bigger market will then be more attractive for potential investors to bring in capital and expertise.
As a result, more national carriers and low-cost carriers can be created, thereby increasing the intra-African air connectivity between major cities.
In the end, this will bring about greater economic benefits and spillovers to the broader economies within Africa.
Solid case for aviation reform
There is an overwhelming sense of optimism about aviation in Africa. People are talking about growth, investments, new terminals, new airports, new airlines and how aviation is going to change over the next five to 10 years.
Ethiopian Airlines has recently signed joint venture agreements and business partnerships with at least 14 countries on the continent as part of its Vision 2025 growth plan, through which the carrier hopes to become “the leading aviation group in Africa.”
From Zambia and Malawi in southern Africa, Chad and soon the Democratic Republic of Congo in Central Africa and Togo, with a likelihood of Ghana in the West, the carrier is seeking to dominate the continent’s aviation space. The airline bought an average of one plane every month last year.
It is expected that the new Bole hub will link Addis Ababa to 70 cities around the globe, 60 of them in Africa.
The state-owned carrier is also banking on its maintenance, repair and overhaul business to offer auxiliary maintenance services to African airlines that it has taken under its wing.
Such collaborations should help African carriers fight off competition from the non-African carriers that now carry more than 75 per cent of the air traffic. It is only through such collaborations that the existence of homegrown airlines in the next decade can be guaranteed.
Yet some African countries are restricting their airspace even when they do not have a proper national carrier or aviation industry. Again, while the African carriers face market restrictions within Africa, the global carriers are provided with greater access.
As a result, they are slowly but surely entrenching themselves in African markets.
Bobby Kamani is the managing director of Zuri Group.
