The number of privately-owned aircraft in Nigeria grew by 650 percent between 2007 and 2012, and other African countries are on similar trajectories, according to a report in BusinessDayLive.
Africa is forecast to grow its business aviation fleet from 350 in 2012 to about 960 aircraft by 2022, according to the latest Bombardier Business Aviation Forecast. The forecast represents about 1,000 new aircraft deliveries and is in line with expected economic growth and wealth creation on the continent, the report said.
In the world of African private commercial aviation, there is high correlation between gross domestic product growth and air traffic growth, says Melanie Humphries, head of Investec Aviation Finance for Africa.
Demand for tailored aviation financing in Africa is booming in line with the continent’s new-found prominence on the global economic stage, Humphries said. “Albeit off a small base, the private aviation sector is, quite literally, taking off.”
Airlines such as Ethiopian Airlines, Kenya Airways, South African Airways and Comair have all successfully raised capital to renew and expand fleets.
In Africa a business jet is a critical business tool for wealthy individuals and corporate clients, Humphries said.
Contributing to the growth in African private business aviation are regional scheduling challenges, need for quick turnaround times, Africa’s sheer size, lack of road and rail infrastructure and a need for privacy, Humphries said.
However, she said the business aviation market is not without its challenges. Lack of infrastructure development and support in the form of fixed-base operators and maintenance centers remain an issue, but in the past few years there has been an increase in training and capital investment.
From an aviation and aircraft-financing perspective, Africa holds great promise, she said, but there are challenges.
The relationship between client, bank, aircraft operator and, in the case of a new aircraft delivery, the manufacturer is important, she said.
“Financial innovation and aviation finance expertise will become a necessity rather than a nicety in supporting this industry,” Humphries said. “We feel optimistic about the availability of funding for deals in Africa.”
Investec started as a small finance company in Johannesburg in 1974, and grew into an international network of various businesses. The company focuses on asset management, wealth and investment and specialist banking.