Africa urged to lower aviation levies in spurring sector growth

Africa’s promising aviation industries are losing their share of the $2.4 trillion (Sh223 trillion) pie that global airlines net annually due to the continent’s high operational costs that has impeded its growth.

Turkish Airlines Vice President for Marketing and Sales Karem Sarp said high taxes on fuel, airport changes and prohibitive fee charged on handling passengers levied by African governments has disrupted the sector their its contribution to the respective countries GDP growth has been minimal.

Sarp reckons that the continent’s aviation industry has the potential to improve the economies of many of the African countries only if the sub-sector is properly positioned. He, however, notes that the continent lags behind in availability, affordability and access to air transportation.

He observed that air transport can play a key role in the economic development of Africa and in supporting the continent’s desire for long-term economic growth.

“It can help make Africa truly an integral part of the global economy by boosting the productivity and growth of the economy through better access to markets, enhancing links within businesses and providing greater access to its vast resources for foreign markets,” explained Sarp at his office in Istanbul recently, where he hosted visiting journalist from a number of African countries.

Sarp said aviation has improved economies and international outlooks of some countries where the sector has been properly positioned. He petitioned African States to create an enabling environment to ensure aviation system is an economic driver for economic growth, social cohesion and job creation. “But it must be done in a prudent manner in partnership with stakeholder to yield the desired results.”

Job opportunities

He said the positive economic effects of the airline industry can be realised by lowering the cost of logistics and doing business, which leads to more employment opportunities. “In fact, it has been widely acknowledged that other players in the aviation chain are far more profitable than the airlines which collect and pass on fees and revenues to them from ticket sales,” reckoned Sarp.

Industry reports indicate that while airlines operate in thin-margin to earn just about six per cent return on capital employed, airports can earn up to 10 per cent, catering companies 13 per cent, handling companies 14 per cent, airplane lessors 15 per cent, airplane manufacturers 16 per cent and global distribution companies more than 30 per cent return.

He said the Turkish Airlines, ranked the seventh largest carrier in terms of international passenger numbers, will increase flights to Kenya and other key African markets. Sarp said the airline will invest more in Africa routes because of enormous potential that exists in the continent. “Although business is currently low in Kenya because of terrorism concerns, however the country is a strategic market for us, especially because it is a regional hub,” said Sarp.

“We are also opening up new destinations in Africa in the next one year so that we can serve the continent better,” said Sarp. Turkish Airline has one of the largest networks in Africa among foreign carriers, overtaking Qatar Airways, Air France and Emirates as it has added 25 African destinations over the last three years.

By the end of this year, Turkish Airlines will have 45 destinations in its African network. High demand for air transport in Africa has seen airlines flock to the continent’s airspace with passenger numbers and freight traffic growing by 45 per cent and 80 per cent between 2010-2015.