Why we need to visualise aviation beyond airplanes, airports

Bobby Kamani, Managing Director, Zuri Group Global

It has been argued that Africa’s aviation sector is bogged down by many headwinds — weak infrastructure, poor connectivity, high ticket prices and low passenger volumes. This can be attributed to various factors such as a lack of political will, a number of money-losing national carriers monopolising the skies, complex rules and regulations that create high entry barriers, and poor safety and quality standards.

If Africa’s aviation sector is allowed to grow, it can spur wide-ranging economic and social growth. Africa can unlock the potential of its aviation sector and a thriving aviation industry, in turn, can transform Africa’s economic and social landscape.

Aviation can change the face of Africa and the rise of Africa, in turn, has the potential to change the face of aviation across the globe. 

Successful tourism numbers and hotel occupancies are also generally attributed to flight connectivity. Mauritius, for example, has always been a very popular tourist destination. However, it is only in September 2002 when Emirates Airlines started direct flights to Mauritius that tourism numbers saw an exponential increase. Should Emirates Airlines decide to fly into Mombasa – will it change the fate of international tourist arrivals into the Kenyan Coast?  

The African skies are largely dominated by international carriers like Emirates, Air France, KLM, Brussels Airlines and British Airways. There are only a handful of African carriers, namely Ethiopian, Kenyan, Royal Air Maroc, South African, Egypt Air and a limited number of small ones, across the 54 countries in the continent which includes almost no low-cost carriers.

If you look across the globe, on average, low-cost carriers account for approximately one quarter of all the flights. In Africa, they don’t even reach 10 per cent, which obviously makes ticket prices somewhat prohibitive. High ticket prices result in a lower number of travelers and as a consequence of this, connectivity remains very poor. For example, there are no direct flights to travel from Nairobi (Kenya) to Nouakchott (Mauritania). One must fly to a second or third country before reaching their final destination. You can choose to take Turkish Airlines via Istanbul and arrive to your destination after 16 hours. Alternatively, you may travel via Royal Air Maroc with a stopover in N’Djamena (Chad) and Casablanca (Morocco) before arriving to your destination after almost 20 hours.  

Our infrastructure is lagging behind the rest of the world. There are, of course, exceptions like in Abidjan (Cote d’Ivoire) and Casablanca (Morocco) where the airport terminal is of a superior standard. But, by and large, the infrastructure is outdated. It was built for a number of passengers that is far less than the actual number passing through its doors each day. For instance, the Kenya Civil Aviation Authority is considering a freeze on new operators at Nairobi’s Jomo Kenyatta International Airport (JKIA) and Wilson Airports due to extreme pressure on the existing infrastructure. However, at the same time, there is an overwhelming sense of optimism. People are talking about growth, investments, new terminals, new airports, new airlines and how aviation is going to change over the next 5 to 10 years.

More recently, Ethiopian Airlines has signed joint venture agreements and business partnerships with at least 14 countries on the continent as part of its ‘Vision 2025’ growth plan, pursuant to which the carrier hopes to become “the leading aviation group in Africa.” From Zambia and Malawi in the South, Chad and soon the Democratic Republic of Congo in Central Africa and Togo, with a likelihood of Nigeria and Ghana in the West, the carrier is seeking to dominate the continent’s aviation space. The airline bought an average of 1 plane every month last year. It is expected that the new Bole hub will link Addis Ababa to about 70 cities around the globe, 60 of them being African. The state-owned carrier is also banking on its maintenance, repair and overhaul business to offer auxiliary maintenance services to African airlines that it has taken under its wing.

Such collaborations from African airlines should be the top most priority in order to withstand the stiff competition from the non-African carriers that are now carrying more than 75 per cent of the air traffic. It is only through such collaborations that we can guarantee the existence of homegrown airlines in the next decade. However, as the airline spreads its wings across Africa, critics say it is pushing a monopolistic agenda, one that will stifle its competitors, who are already struggling to maintain a foothold in the sector. African governments need to be careful not to create an aviation monopoly on the continent. Ethiopian Airlines has a fantastic growth strategy but risks becoming a continental monopoly, which would be bad for competition.

The biggest challenge facing aviation services in Africa is also its biggest opportunity. When we look at the statistics, we realise that the continent has not yet managed to unleash the full potential of aviation. From the economic trends, it is clear that a number of mega-cities are going to emerge on the continent — cities with over 10 million inhabitants. As this happens, and as also the middle class emerges, there is going to be a lot of demand for aviation services, because there will be big cities with a concentration of knowledge workers who will need to use their skills beyond the cities where they live. 

If you look at poor connectivity in particular, I think it’s the result of two issues. First, it is about the actual economics of the business. There is a need to have a certain demand between two points for them to justify a common route. So far, the level of development that we have in the African cities has not created that demand. I am not just talking about the GDP rates but about their political integration. The fragmentation and the disparity of Africa create a number of barriers. Some policy decisions that were supposed to make it possible for exchange and flying to be easier were adopted in theory, but not implemented in practice. 

If the national carrier is not profitable, there is no need for the government to subsidise it. There are countries across the continent, like Uganda and Ghana, that do not have a national carrier and yet they have a vibrant aviation sector. 

We are also going to have a lot of exchanges within African countries or even from the West to Africa. The biggest challenge facing the continent is that the aviation sector must mature in a way that it doesn’t become a hindrance to the economic growth. Instead, it must become one of its drivers.

If we are to consider the successful stories across the continent, it is plain to see that these countries have put in place proper governance structures around the aviation sector. If it is an airport authority, they have spun it off from the government, given it a board, given it a CEO and given it autonomy. If it’s a national carrier, they have put in place a proper board of directors. They have not allowed the politics of the country to affect the management of the airline. So the first thing I think is the use of governance as a strategy to address these challenges. The second one is privatisation — privatising the airport, the national carriers and service providers. This has been a very successful model across the continent and in fact across the world. It leads to partnerships with companies or entities that are experienced, public-private partnerships, and foreign investors coming into the country, which is always a good thing. 

Countries that are doing well in delivering aviation think about their aviation sector as a part of an overall economic strategy. When we look at countries like Ethiopia, Kenya and Morocco, it’s very clear that the aviation sector is linked to other sectors that are driving growth. For example, there is a lot around tourism, trade and exports. It’s important for countries to start thinking about aviation beyond just airplanes and airports. It’s important to see aviation as one of the forces that can transform their economy.

I believe that aviation can do a lot by way of economic integration. The immense diversity of Africa is both a curse and a blessing. It is a curse because our countries are fragmented. The population of 1.1 billion people is similar to that of India, with the only difference being that India is one country, Africa is 54 countries. If we can get aviation going, we can start seeing more integration. We can start seeing Ghanaians working with Kenyans to develop products that they can sell to people from Morocco or Egypt. So, to me, aviation can play numerous roles which are very positive. The Single African Air Transport Market (SAATM) is a step in the right direction.

If you go back to the 1970s there were probably fewer than 5 million passengers in Africa. Today, there are more than 120 million to 130 million passengers in and out of Africa. The market is growing tremendously and there is room for both African carriers and international carriers to succeed. The only difference is that in the past the international carriers had a large percentage of the total market, but now, as the regional or the African carriers increase their frequency, acquire more aircrafts and fly more passengers, they are starting to increase their share of the market. I also think that many second tier cities will be served by the regional carriers whilst the international carriers will serve primarily the capital cities.

It seems that Africa is evolving within two paradoxes. First, some African countries are restricting their own air access, while they may not even have a proper national carrier or aviation industry. Second, while the African carriers face market restrictions within Africa, the global carriers are provided with greater access. As a result, they are slowly but surely penetrating and entrenching themselves deeply within the African markets. For instance, European carriers like Air France-KLM and Lufthansa, as well as Emirates from Dubai, are extending their reach to more and more African destinations. Greater access to the African skies means a bigger potential market to tap into. Since aviation is a very capital-intensive industry, a bigger market will then be more attractive for potential investors to bring capital and expertise. As a result, more national carriers and low-cost carriers can be created, thereby increasing the intra-African air connectivity between major cities. In the end, this will bring about greater economic benefits and spillovers to the broader economies within Africa.

African governments need to rectify the situation in the aviation industry, by gradually opening their skies to other African carriers. While they can still focus on building their own national carriers, they can slowly liberalise this sector along with the removal of visa restrictions for Africans travelling within the continent. Not only can aviation then be an economic catalyst by providing a strong impetus to the overall economy, but it will also build the links and strengthen the bonds among African countries.

African leaders require a clear roadmap which can help them, both from the private and from the public sector, to agree on what needs to be done for aviation to take its proper role in Africa. Once strategically implemented, less turbulent times lie ahead.

Bobby Kamani, Managing Director, Zuri Group Global