Issue 11 | ...Celebrating the world’s richest continent | http://www.nomadafricamag.com | 75RwandAir’s ambitions are very much in line
with the country’s economic ambitions. Being
landlocked, it is imperative we have access, we
have a huge part to play.”- Yvonne Makolo,
RwandAir Deputy Chief Executive
following the deregulation of the US mar-
ket in 1978 and in the EU in 1993.”
“African aviation contributes only 3% of
global passenger traffic, whilst having 12%
of the world's population and 15% of the
world's land mass. The potential for
growth is clearly evident.”
“Africa is also a high cost environment.
Many airlines’ operating costs are in US
Dollars, e.g. aircraft ownership and leasing,
maintenance, distribution costs, jet fuel,
navigational and infrastructure costs if op-
erating outside of South Africa. African
state's volatile exchange rates further
contribute to high operating costs. This
increases the cost base of the airline and
the air fares become higher to try and
cover these costs and achieve some prof-
itability.”
A quick peek at the starting line will tell us
that certain airlines are already well posi-
tioned to take advantage of SAATM.
Again here an insider’s view is relevant:”
Some carriers, notably Ethiopian Airlines,
are rapidly establishing bridgeheads
across the continent. Ethiopian Airlines’
rapid route network and parallel fleet ex-
pansion is already delivering the goods
and has seen the airline attain double-digit
annual growth and profit margins (the lat-
ter being a rarity in the global airline in-
dustry).” Says managing director Linden
Birns from Plane Talking.
“If and when SAATM comes to pass, this
footprint will undoubtedly be to Ethiopian
Airlines’ advantage. In contrast, South
African Airways, once regarded as the
biggest threat under an open skies in
Africa, is shrinking its network and cutting
back on its fleet. It is a move that seems
designed to restore its balance sheet and
profitability in the short term, but success-
ful airlines are those that grow their net-
works through increased productivity and
optimised utilisation of resources.”
RwandAir has also not been idle with its
ambitions for its national airline, including
route launches to Europe a good indica-
tion of capitalising of new routes. For a
landlocked country that is relatively small,
having a national carrier may seem like a
luxury, but Rwanda’s government is con-
vinced of the need to enhance transport
links and grow its size of the aviation cake
to serve West and Central Africa as a
whole.
RwandAir deputy chief executive Yvonne
Makolo says: “RwandAir’s ambitions are
very much in line with the country’s eco-
nomic ambitions. Being landlocked, it is
imperative we have access, we have a
huge part to play.”
“RwandAir has a hub-and-spoke model
and we are trying to get as many feeders
into the hub as we can. Some countries in
Africa, particularly in the west, are under-served. We see an opportunity to take
these people to China, Mumbai and now
the UK as well.”
Other dominant airlines, apart from star
performer Ethiopian Airlines, include
Kenya Airways, Egypt Air, and potentially
South African Airways.
With these big airlines well positioned to
take advantage, does this not beg the
question of how SAATM will affect smaller
airlines? Aviation expert Linden Birns:”Air-
lines compete in a tough environment and
require robust strategies, resilient business
models and either deep pockets or access
to sufficient finance, to survive. Under
SAATM, any regulatory market access
protection airlines currently enjoy in their
home markets will be removed and, just
like any other business, they will have toemploy their competitive wits to identify
and exploit their commercial advantages
in order to survive and grow.”
“This may compel some carriers to forge
alliances or commercial partnerships, it will
force them to re-think how they market
themselves and to look to the destinations
and markets they serve or want to serve,
for marketing support and other incen-
tives.”
IATA’s Vice President for Africa Rapahel
Kuuchi cautions: “The decision is momen-
tous. SAATM is a decisive step towards
greater intra-African connectivity and de-
livers the framework on which to achieve
it. Now it’s time to get down to the work
of implementation. Greater connectivity
will lead to greater prosperity. Govern-
ments must act on their commitments,and allow their economies to fly high on
the wings of aviation.”
Looking at SAATM and the future, excit-
ing times lie ahead and it will be interest-
ing to observe how the African airspace
develops with current and emerging play-
ers. Political will, strategy and an ambition
to successfully compete on a global scale
will be key factors in how African airlines
evolve within the context of SAATM in a
brave new sky.
Current signatories to Single African Air
Transport Market (SAATM) are: Benin,
Botswana, Burkina Faso, Cape Verde, Re-
public of Congo, Ivory Coast, Egypt,
Ethiopia, Gabon, Ghana, Guinea, Kenya,
Liberia, Mali, Mozambique, Niger, Nigeria,
Rwanda, Sierra Leone, South Africa, Swazi-
land, Togo and Zimbabwe.“Some carriers, notably Ethiopian Airlines, are rapidly establishing
bridgeheads across the continent. Ethiopian Airlines’ rapid route
network and parallel fleet expansion is already delivering the goods
and has seen the airline attain double-digit annual growth and profit
margins (the latter being a rarity in the global airline industry).”- Linden Birns, Managing Director, Plane Talking.