The landscape of the African airline industry has changed significantly in the past 25 years. Numerous former stalwart national carriers, such as Air Afrique, Ghana Airways, Nigeria Airways and Zambia Airways, have gone bankrupt; several privately owned airlines, such as Arik Air in Nigeria, Precisionair in Tanzania and Fly540 in Kenya, have gained ground; and low-cost carriers, such as Atlas Blue in Morocco, and Kulula, 1time and Mango of South Africa, have emerged with varying degrees of success.
In addition, the average age of Africa's commercial aircraft fleet has declined with increased modernisation. Global airline alliances have finally turned their attention to the continent in search of partners and the traditional competition between African and European airlines for the growing long-haul traffic has intensified with the entry of Middle East carriers offering an attractive mix of more capacity, more frequencies and lower fares.
Nonetheless, many old challenges remain. Air safety in Africa is still a major concern, market liberalisation remains a hot talking point over insufficient action, many balance sheets are still weak, access to capital is difficult, airline co-operation is very limited and consolidation - to benefit from economies of scale - has yet to truly take hold.
With Africa's annual economic growth forecast to exceed the world average, according to the International Monetary Fund, and air travel now more affordable to the continent's more than 800 million population, air traffic seems set to take off. In recent years, this optimism has translated into firm orders for both jet and turboprop aircraft manufacturers and more opportunities for aircraft leasing companies.
Airbus forecasts a demand in Africa from 2009-2028 for 929 new aircraft worth $107 billion. Boeing more conservatively predicts that Africa will require 710 new aircraft worth $80 billion between 2010 and 2029, while Embraer sees a requirement in Africa for 220 new jet aircraft in the 30- to 120-seat segment and 130 new turboprop aircraft over the same period.
A major development has been the admission of South African Airways, EgyptAir and Ethiopian Airlines as full members of the Star Alliance, and Kenya Airways to SkyTeam. Oneworld includes British Airways franchisee Comair in South Africa as an associate member, but is the only global alliance without an African airline as a full member. This presents an opportunity for up-and-coming, non-aligned African carriers.
"The new Star Alliance link-up between EgyptAir, SAA and Ethiopian is a potentially powerful axis for assisting weaker African airlines," says Hussein Massoud, chairman, EgyptAir Holding Company. Alliance membership is changing the dynamics of the African airline industry. Long used to its dominance of intra-African routes, Ethiopian is today facing intense competition from Kenya Airways, which has established a rival African network under the strong leadership of Titus Naikuni.
Siza Mzimela, SAA's new chief executive, is seeking to replicate her successful management of regional carrier South African Express, and to strengthen the national airline's presence across Africa. Meanwhile, the high turnover of management remains a source of concern at some African airlines. Government-owned Air Mauritius, for example, recently appointed its eighth chief executive in 13 years.
The influx of foreign airlines into Africa in search of more traffic and higher yields is evidence of market expansion. Cash-rich Emirates has built an impressive African network and is siphoning traffic through its Dubai hub. Delta Air Lines is steadily growing its market share on Africa-USA routes, United Airlines is preparing to inaugurate services to Africa, and low-cost carrier Air Arabia is giving North African airlines a run for their money.
This new competition has put increased pressure on African airlines and provided passengers with more choices. While airline business models have certainly evolved in Africa, a paradigm shift in attitude is needed in order to capitalise on growth opportunities achievable through co-operation and consolidation.
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Nick Fadugba is an African aviation journalist who also provides consultancy services. He was briefly secretary general for the African Airlines Association, but resigned after just four months.