Landing on a runway near you (Africa Report n°32 – July 2011)

Africa’s major airlines are knitting new networks across the continent as smaller regional airlines seek consolidation

Travellers fed-up with country-hopping across Africa should see their flight options open up as African airlines invest in new routes criss-crossing the continent. Africa still represents a tiny part of the global business, accounting for just4.1% of the scheduled traffic in January 2011, according to analysts Innovata. But African airlines are ramping up capacity to fill new passenger and cargo demand between the continent’s fast-growing economies, and the number of weekly intra-African flights bas doubled since 2005.

With profits up 73% during the 2010-2011 financial year, Kenya Airways has grown with the expansion of its African footprint. The airline has launched new routes to Juba in South Sudan, to the Angolan capital Luanda and Nampula in Mozambique, and has further plans to link up to N’Djamena, Ouagadougou and Abuja. African governments place great significance on national carriers and in June Kenya’s treasury set aside KSh5.5bn ($62.6m) to keep its 23% stake in Kenya Airways, which is preparing a rights issue for later this year.

Further south, just over 30% of the 6.6 million customers South African Airways (SAA) flies are intra-African travelers. In the next five years, « customers flying between international and intra-African hubs will increase to over 40%, » the airline told The Africa Report. SAA bas new routes planned for Nigeria, Madagascar, the Republic of Congo and Burundi. The airline sees its intra-African expansion as a long-term strategy tied into its role as a state owned entity that will « contribute significantly to economic integration on the continent ».

West African travelers who have suffered in recent years from the lack of a strong regional airline now have new choices. The reincarnated Air Nigeria (formerly Virgin Nigeria), acquired in April 2010 by billionaire businessman Jimoh Ibrahim’s Nicon group, is working to position Lagos’s Murtala Muhammed Aiport as a regional hub. After restarting flights to Côte d’Ivoire, Ghana and Senegal, Air Nigeria is due to relaunch daily direct flights to London’s Gatwick airport in September.

It faces strong competition from ArikAir, which carried more than 2.3m passengers in 2010 and runs more than 150 daily flights out of Lagos, including international routes to London’s Heathrow and New York’s JFK.

Some African airlines remain on the hunt for private investment, while others, such as Air Mali and Air Burkina, are considering consolidation. The long-delayed plans by the Economic Community of West African States (ECOWAS) to create a regional carrier called ECOAIR have also come back to life.

African carriers dominate intra-African routes, accounting for 97% of capacity in May 2011 according to the African Airlines Association (AFRAA). They also run 71% of the flights between Africa and Asia. While Middle Eastern carriers such as Emirates and Qatar Airways are working to build significant African footprints, Chinese airlines have yet to see the attraction of Africa’s smaller destinations, preferring instead to focus on the fast growing domestic market. Of the top three Chinese airline groups, only China Southern runs a direct flight to Africa: from Guangzhou to Luanda. A plan to resume an earlier route to Lagos via Dubai was shelved in October 2010. However, perhaps in a sign of bigger investments to come, Hainan Airlines is creating a joint venture with Ethiopian Airlines and the China-Africa Development Fund to build a five star hotel near Addis Ababa’s Bole International Airport. In the meantime, carriers such as SAA are moving fast to fill demand. It will start direct services from South Africa to Beijing from 1 September, operating three flights a week.

Despite their bold pan-continental goals, African airlines face considerable challenges, among them capacity-dumping by international airlines trying to elbow out competition, and the poaching of staff by Middle Eastern headhunters. One Gulf-based company has been aggressively recruiting staff from African airlines, with one airline recently losing 17 highly-skilled employees. AFRAA’s Tewodros Tamrat, director of government, corporate and industry affairs, says the practice was « very unfair for our airlines and anticompetitive by nature as the affected airlines are practically subsidizing them. » AFRAA has appealed to the African Union and the African Civil Aviation Commission to help stop the mass recruitment.

A decision by the European Union (EU) to blacklist 14 African airlines, most recently LAM Mozambique, also presents a setback. « The stigma of the list is driving away potential and existing traffic from the African carriers that are maintaining international safety standards, » says Tamrat. AFRAA is angry that the EU has designated itself as what Tamrat calls the « global police for safety », even for airlines that have no intention of flying near European airspace. To date, 36 African airlines are currently certified by the International Air Transport Association’s Operational Safety Audit programme, and AFRAA is working to increase this and improve standards.

Gemma Ware

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