JAN - FEB 2018 LUA 13African carriers
are expected to
continue to make
small losses of
$100 million in
2018 following a
collective net loss
of $100 million
in 2017.
IntERnAtIOnAl AIR
tRAnSpORt ASSOCIAtIOnCEO of Camair-Co, says the airline has
improved its monthly deficit from 2 billion
to 62 million FCFA in the last one year.
RwandAir CEO, Col. Chance Ndagano,
and Air Tranzania CEO, Ladislaus
Matindi, both reveal the positive growth
trajectory of the airlines, which reassures
of their focus on reaching profitability
overtime. Ahmed Aly, CEO of Nile Air,
which received its one millionth passenger
in the first nine months of 2017, says
the airline is intent on maintaining its
profitable operations. In this regard also,
Ethiopian’s Vice-President for Strategic
Planning and Alliances, Henok Tefera,
emphasizes the need for African airlines to
work more cooperatively.
According to the International Air
Transport Association (IATA), “African
carriers are expected to continue to make
small losses of $100 million in 2018
following a collective net loss of $
million in 2017. Stronger forecast of
economic growth in the region is expected
to support demand growth of 8 percent
in 2018, slightly outpacing the announced
capacity expansion of 7.5 percent.”
Much hope is hinged on the ability of
recovering economies in Nigeria and South
Africa, and stronger growth in several other
African economies to drive demand and
improve the performance of African airlines
in 2018 and beyond. IATA explains this
further: “While traffic is growing, passenger
load factors for African airlines are just
over 70 percent which is over 10 percentage
points lower than the industry average. With
high fixed costs this low utilization makes
it very difficult to make a profit. Stronger
economic growth will help in 2018, but the
continent’s governments need a concerted
effort to further liberalize to promote growth
of intra-Africa connectivity.”
Cargo airline services is one vital sub-
sector that appears neglected even though
it is another fulcrum for economic growth.
Africa still has less than 2 percent of
global air cargo market, which reflects the
limited exploitation of the cargo potentials
in Africa, and the poor engagement of
African airlines in air cargo operations. In
fact, cargo airlines are generally seen as a
service reserved for old, disused aircraft.
Currently, however, airlines like
Ethiopian are changing this perception
by building efficient technology-based
cargo fleets. It is noteworthy, also that
though several airlines are expanding to
new routes in West Africa like Air Peace,
Medview and Overland Airways, and
Africa World Airlines. However, there are
hardly dedicated cargo airlines among
those expanding in the region, which raises
a big question mark over the readiness of
African airlines to venture into dedicated
air cargo services. But quite interestingly,
the profit-making status of Astral Aviation,
a cargo-only airline based in Kenya, indeed
makes a strong statement of hope about the
potential of cargo airlines in Africa.
Although cargo infrastructure is
picking up in some African airports like
Johannesburg, Addis Ababa and Nairobi,
among few others, generally, cargo and
aviation infrastructure in Africa are in
a deplorable condition that repels airlines
expansion and other investors, which makes
airports not to become regional transit hubs
or destination airports from airlines.
While the Lome Airport has undergone
remarkable upgrade to meet the upsurge
brought on by the activities of Ethiopian
and other airlines, there is need to pay
particular attention to cargo facilities at
airports in the surrounding region. This
will aid the exchange of agricultural,
horticultural and other perishable products
produced in Africa especially between West
Africa and East, and other regions.
The out-going Secretary General of
AFRAA, Elijah Chingosho, while soliciting
support from industry stakeholders to
AFRAA’s efforts to drive the development
of African airlines, makes a strong call
for the improvement of airports facilities
in Africa. He also says more African
airports should be stepped up to 24 hours
operation to enable more passengers travel
with greater convenience.“Travellers will be attracted to airports
with good facilities,” says Chingosho. In line
with the view of most African airlines, he
also calls for the removal of visa restrictions
and other non-physical barriers that
prevent the easy movement of African
airlines, tourists and traders within the
continent. This, of course, complements the
fervent call for the free movement of cargo
among Africa’s economies. In this regard,
Sanjeev Ghadia, founder and CEO of Astral
Aviation, calls for the establishment of free
trade areas to enhance the production and
exportation of air cargo within Africa. This,
he says, will address the challenge of flying
empty legs when cargo airlines operate
intra-Africa routes.
This is also the mind of Ato Girma
Wake, veteran airline and aviation
expert, who served previously as CEO of
Ethiopian and Chairman of RwandAir.
He says African airlines must have
shared vision in developing connectivity
within Africa. This indeed requires a lot
of discipline to achieve. But can African
airlines think big and be realistic in
taking over the future as Girma Wake
wants them to?
There is much to hope for Africa’s
cargo and passenger airlines in 2018 and
beyond. Safety must continue to be the
number priority for African airlines while
these airlines pursue the opportunities
ahead. IATA’s Director-General and CEO,
Alexandre de Juniac, also emphasizes
the essence of using IATA’s operational
safety audits (IOSA) to enhance safety in
Africa, and the need to cut sundry costs.
Therefore, African governments, who plan
to launch the Single African Air Transport
Market (SAATM) in January 2018, must
become more realistic and cut down costs
facing African airlines in all aspects such
as fuel, taxes, fees and charges.
While airlines and states must push more
vigorously in 2018, AFRAA’s new Secretary-
General, Abderahmane Berthe, must hit the
ground running as he is now expected to
drive stronger advocacy for government’s
increased support to airlines and aviation
infrastructure development. African airlines
most importantly should increase their
appetite for cooperation, collaboration
and coordination in the face of emerging
passenger and cargo opportunities.
When AFRAA meets again in Morocco
in 2018, African airlines should have a new
success story to tell.