African aviation market has lots of potential

25th June 2013

By: Keith Campbell

Creamer Media Senior Deputy Editor

  

Font size: - +

African commercial aviation faces both great opportunities and great challenges. “There’s a lot more hope, a much more positive attitude, around Africa,” affirmed UK-based airline consultancy Athena Aviation managing partner Sudeep Ghai on Tuesday at the Aviation Outlook Africa 2013 conference in Sandton, Johannesburg. “At least seven airlines have been started within the continent in the last 18 months. It’s a great market, with lots of potential.”

On the other hand, worldwide, aviation “is a tough industry to make money in – especially if you’re an airline,” he cautioned. The global average airline profit margin is just 0.1%. “Fuel prices, pilot shortages, scarce human skills, are going to continue to put pressure on airlines in Africa.”

Although African airlines will acquire lots more new aircraft over the next 20 years, their competitors outside the continent, especially in Asia and the Middle East, will receive even more. He highlighted the rising importance of the Middle East in commercial aviation. “Don’t lose sight of the importance of the Middle East in the aviation space. Europe is really feeling the pain from the Middle East hubs building up.” And this development of major hubs has been accompanied by the development of major airlines, such as Emirates, Qatar and Turkish.

Given the fierce competition, some African national carriers and their home countries are reluctant to open up their markets. “You have to be very careful about going down the protectionist route. Protectionism doesn’t necessarily benefit your airline or your country,” he warned. “The great news is that there are moves to slowly liberalise the African [airline] market. Without a commercial approach, [African] airlines will not weather this period without destroying shareholder value.”

Often, the problems faced by African airlines are created by their own governments. “Get your governments to provide an enabling environment that is good for business,” urged Ghai.

Airline managements also need to be made up of the right people in the right jobs with the right mindsets. “Build a diverse and talented team with the right skills in the right places – the best people for the job,” he asserted. “Accept challenge and the need for constant change.”

To watch Creamer Media's latest video reports, click here
 

Edited by Creamer Media Reporter

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION