African airlines have notched up an encouraging number of new routes, but are still in a poor financial position overall, the Aviation Development Conference, AviaDev, has heard.
In a keynote address on the outlook for the industry, Embraer Commercial Aviation sales director Gad Wavomba, said African airlines were expected to make combined losses of $100-million this year.
The industry has improved from its bottoming out in 2013, but has continued to battle.
“There are a lot of challenges to overcome before driving profitability for airlines in Africa,” Wavomba said.
However, connectivity into Africa has increased by five percentage points, while 70 new routes had been added in Africa alone, both in regionally and locally.
Wavomba highlighted several trends in the industry, including right-sizing, which focuses on choosing the right aircraft for the right markets. He said, in Africa, 95% of flights were less than half-full. Some countries were getting it right.
He said Tanzania had decided to right-size and replaced its aircraft with smaller ones, while in Zimbabwe, right-sizing had led to a 65% increase in revenue.
He hoped the Single African Air Transport Market initiative would boost the development of routes. So far, 23 member States have signed the commitment.
Wavomba said more route competition would lead to lower fares and stimulate additional traffic volumes.
Collaboration between airlines was also essential. He mentioned the synergies South African Airways, Kenya Airways and Air Mauritius were working on and commended Cape Town Air Access for developing routes.
“Things are better in the industry in Africa but profitability continues to remain a challenge. We need to mitigate that through right-sizing, information technology and airport infrastructure investment and collaboration across the industry.”
Representatives and leaders from major airlines across Africa are in Cape Town for the three-day AirDev conference.