Sata 4000 RP

With North America, Europe and Asia experiencing a boom in low-cost flying and the Gulf carriers becoming some of the biggest players in the market, Africa has long remained an untapped source of aviation growth.

In a report in April, the World Bank said over 60 percent of Sub-Saharan Africa's economic growth was down to consumer spending, and as millions of Africans come out of poverty, the middle class across the continent will continue to grow.

As trade between African nations rises, there is also a growing need for fast, efficient travel between countries. Yet air transport links remain under-developed and there are few low-cost carriers (LCCs) that serve the continent.

Elijah Chingosho, the secretary general of the African Airlines Association (AAA), said there were two major problems for the development of low-cost aviation on the continent.

"The cost of doing business in Africa, because governments levy very high taxes on airlines and on fuel," was one he said, "and the limited penetration of credit cards and internet use in Africa," was the other.

(Read More: Shifting Balance of Power in Aviation Business)

Speaking at the International Air Transport Association's (IATA) annual meeting last week, Chingosho claimed that in the rest of the world fuel costs accounted for around 30-35 percent of operating costs for airlines.

In Africa, the figure was between 45 and 55 percent. Thus, in some cases, airlines in Africa had to spend over half of their budget on fuel alone.

Still, aviation growth has been growing steadily. IATA reported in May that international air passenger demand in Africa grew by 3 percent between April 2012 and 2013, and by 1.4 percent between March and April of this year, indicating a recent uptick.

Of course, much of this air travel comes from international carriers, and Africa still has trouble ensuring cheap and steady transportation on the continent itself. FastJet, an airline attempting to become the first continent-wide low-cost carrier in Africa, is planning to expand after success in Tanzania, despite a difficult 2013 since its formation. #

At the Paris Air Show, there was clear interest from many in working in the continent, yet a general sense of uncertainty over when exactly Africa would start to replicate the boom witnessed in recent years in Asia-Pacific.
(Slideshow: The World's Fastest-Growing Airlines)

Airbus' vice president of engineering, Charles Champion, emphasized his company's decent order book from Africa: a strong market with Nigeria, twelve new Airbus A350s scheduled for Ethiopian Airlines, as well as a good relationship with South African Airlines.

"In the countries where there is development, there is room to build on, and we start to see an emergence for new aircraft," Champion said. But, he added: "It doesn't go as fast as people predict, but definitely, Africa is growing."

The president of regional jet maker Bombardier Commercial Aircraft, Mike Arcamone, said Africa was a long-term strategy, but one he remained confident on.

"We're doing well with our Q400 and with the CRJ," he told CNBC, referring to planes which can seat between 50 and 100 passengers. "Eventually, you've got to look at it from a long-term point of view: as people start traveling in the continent in Africa, as you see a shift from a Q400 to CRJ to an aircraft with more seats, the trend demonstrates that the CSeries will do great."

The CSeries is Bombardier's new aircraft that carry more than 100 passengers and is also more fuel efficient than older-generation planes.

Bombardier forecasts that between 2013 and 2032 it will deliver 6,900 aircrafts with between 100 and 149 seats. Arcamone believes that when low-cost carriers emerge in Africa, they will use the C-Series given that it was designed for shorter runways and warmer climates. "The capability of this aircraft fits exactly what the airlines are looking for in Africa," he said. "Even though they don't have LCC, eventually they will. The only way you can afford LCC is with this type of aircraft."

(Read More: The Stories to Track at the Paris Air Show)

Brendan Sobie, an analyst at CAPA, the Centre for Aviation, said many African air carriers are developing long-term strategies for potentially large markets – namely, Africa to Latin America and Africa to Asia. Sobie said that countries like China and Brazil had a strong desire for regular connections with Africa, and that was something that needed to be developed.

However, Accenture analyst Damien Lasou questioned whether Africa had the right economic and demographic mix to create a surge in air travel.

"There is a simple relationship between economic growth and airline traffic," Lasou said. "We saw the emergence of Asia Pacific in terms of travel and transportation as we saw the economic parameters of those countries booming. We know that Africa is not there."



Just think of all of the great overnight opportunities.

F224

We will not see an major growth in aviation in Africa beyond a minimal amount until the property rights laws are fixed.

Amanda

I would love to move to Africa to fly. I've been to Uganda working with a non-profit and met some amazing people. I'd go back in a heartbeat.

EYBusdriver

This dream will never happen until they fix the issues of corruption, nepotism and the rule of law.

Typhoonpilot

EK have added quite a few destinations in Africa over the last few years. Durban, Lusaka, Harare, Luanda, and Dakar to name a few. That to the already existing network that included Jo-Burg, Capetown, Lagos, Accra, Abidjan, Nairobi, Dar-Es-Salaam, Entebbe, and Addis. Plus the North African destinations of Tunis, Algiers, Tripoli, and Casablanca.

It is an expanding market there is no doubt about that. There is money to be made there for a smart airline. Ethiopian is giving it a go with their current plans. Fastjet in Dar will also be interesting to watch.


Typhoonpilot

Hey EY, you on the Boeing now?

EYBusdriver

Yup...Went over to the T7, and happy about it.

F224

Exactly. The major players will be able to come in and operate because they can buy off the right people at the top, it's the small supporting businesses that will have a difficult time getting started for the the reasons you mention.

You can afford to pay only a limited number of "Carlos the greasers" as I have done to get into Moz' to go hunting.

EYBusdriver

Many of the governments and/or officials have the knack of killing the goose who laid the golden egg. My company used to operate a freighter into Ndjema, Central African Republic, was a profitable operation except the officials kept increasing fees until it was no longer viable. Each time I flew in there were all sorts of minor officials with their hands out collecting "fees".
If you made the mistake and took a picture they would be on you right away, "security boss", and a fine would have to be paid in cash or you lost your camera, or the flight delayed, or you were arrested. The fine was normally 100 Euros negotiated down to 10 Euros and six cokes.

got2fly

Having lived in Africa, I can tell you the continent is on the MOVE. Americans are completely out of touch with what is going on there. The Chinese are investing heavily in Africa. They see opportunity, and they are right. I used to fly all over the continent for an African Airline and half the airplane was Chinese businessmen. I'd go down to breakfast at my hotel and it seemed like most of the people in the restaurant were Chinese businessmen.

Does Africa have a lot of problems to fix? YES. Definitely. Are some African countries not growing economically and even moving backwards? Yes again. But many countries in Africa are seeing double digit growth of their economies each year, and their neighbors are recognizing that they can get on the band wagon or be left behind. Many African cities have many huge building projects underway. You get into a conversation with an African from one of these countries, and he'll say things like "it's our time", "it's our turn", etc with a big wide smile on his face. This is a different era for Africa. Trade-Not-Aid is the new catch phrase in much of Africa. Check out Dambisa Moyo videos on YouTube and you'll see the kind of optimism and professionalism that you see rising throughout the continent. Do they have a loooong way to go? Yes, but Africa is on the MOVE.

The Dominican

There, I fixed it for you!