Sustaining the good news from Africa aviation

The African Airlines Association, the organisation which represents the interests of airlines in Africa, reported recently: “In the Q1 of 2024, African airlines experienced robust growth in ASKs and RPKs Level exceeding 2023 with 18% and 19% respectively. This uptick signifies a promising trend in air travel demand across the continent, reflecting increased connectivity and economic activity despite ongoing challenges in the aviation industry. It was also noted that Passenger Revenue in the first quarter 2024 was 8% increment as compared to passenger revenue in the first quarter 2023.”

African entrepreneurs have shown their ability to weather the storm as they have not lagged behind after the pandemic. To sustain the improvements being recorded, the aviation sector in Africa needs to continue its efforts at the Single African Air Transport Market (SAATM), think deeply around the strategy of competing with big foreign airlines on long haul routes, and think about collaborating to deal with the challenge of high leasing and fuel costs that make profitability challenging.

Global airline industry performance, according to the report, witnessed a dynamic start to the year 2024, while contending with industry headwinds. In the face of post pandemic challenges, the airline industry maintained its trajectory of recovery during the first quarter of 2024 with a rebound in passenger demand.

Fuel prices, the report states further, remained a significant concern for airlines, as geopolitical tensions and supply chain disruptions contributed to volatility in oil markets. The fluctuations in fuel costs was a source of pressure on the operating expenses of airlines such that profitability was impacted. The response strategy was to carefully hedge fuel to manage risks. 

Christos Shepherd, an African-aviation expert with a London-based consultant, Mango, several years ago, stated: “Besides high fuel and ticket taxes, African airlines have to pay more to lease planes than carriers in other regions. A five-year-old Boeing 737 might cost a Nigerian carrier up to $400,000 a month to lease, compared with $180,000 in Europe, because of local carriers’ poor safety record and the courts’ sluggishness in dealing with previous bankruptcies.” 

He stated further: “Insurance costs for African carriers can also be stratospheric. What would help bring down those costs is a partnership with an established international airline.”

While experts believe that the success of Europe’s budget airline boom which came after hard fought battles for “open skies” in the 1990’s can be replicated in Africa,  the problems, some experts believe, for new airlines on the continent go beyond protectionism and murky politics. There is demand for low-cost flights, Shepherd says, but low-cost airlines “cannot operate because the costs are not low.”

The good news is that Africa’s internal air market is increasingly interconnected, with direct flights that stay over the continent replacing long-haul transfers in big European airports. This calls for collaboration with airports over charges and taxes to sustain the growth trajectory.

In the report by the African Airlines Association, it stated further that “Intense competition persisted within the airline industry, particularly between legacy carriers and low-cost carriers (LCCs). The state of competition globally is a pointer to what happens when low-cost carriers are encouraged. Competition will bring down prices and they can only do so where the industry stakeholders along the industry value chain work collaboratively in this regard. Lower prices mean more passengers flying through the airports, more footfalls as meeters and greeters come to the airport and it is good for the aviation sector and the economy of the state where the airport is based.” 

There was also good news on the openness of African countries. By the end of 2023, says the report, Africa experienced a significant enhancement in visa openness, marked by a surge in intra-continental travel facilitation. Regional integration and tourism received a boost from several African nations which implemented visa-free or visa-on-arrival policies for citizens from fellow African countries, it says. This was due to the efforts towards the African Continental Free Trade Area which aimed to ease movement of people and goods across the continent. There was also the use of digital visa platforms and the streamlining of visa procedures so that entry processes for international travellers were made simple. These efforts toward visa openness in Africa were aimed at fostering economic growth, strengthening regional cooperation, and unlocking the tourism potentials of the African continent.

Africa still has potential, and the sector will continue to thrive as all stakeholders collaboratively keep their eyes on the needs of the passengers.

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