Are African Airlines’ Failures Opening Door For Gulf Airlines?

Are African Airlines’ Failures Opening Door For Gulf Airlines?

African countries’ failure to manage their air transportation properly has opened the door to Gulf airlines such as Emirates, Etihad and Qatar, said Hadi Akoum, head of sales for Airbus Africa and Middle East, in BusinessDayLive.

Gulf airlines are expanding their African routes but also positioning themselves as international hubs for Africa, Akoum said. That means international travelers fly to and from Africa through Dubai, Abu Dhabi and Qatar.

That translates not only into more traffic for Gulf airlines, but also more business for their tourism industries and economies.

Emerging markets are expected to drive air traffic growth and they’re forecast to grow 6 percent annually compared to 4 percent for mature markets. Right now, emerging markets account for 39 percent of air passenger trips and also 39 percent of aircraft in service, BusinessDayLive reports. By 2032, says Airbus, these shares will grow to 54 percent and 51 percent respectively.

Some African airlines have recognized the challenge, Akoum said. SAA is the recognized airline for Southern Africa. Ethiopian Airways is making a strong pitch for East Africa. Kenya Airways is also strong in that region, although recent terrorist attacks undermined its position.

Elsewhere, particularly in West Africa, the market is wide open to whoever wants it the most. Nigeria, despite its growing economy and huge population, has shown it’s unable to sustain a reliable, profitable airline, BusinessDayLive reports.

The potential rewards for all countries are great. Industry figures show that between 2005 and 2011, the number of international tourists visiting sub-Saharan Africa grew by 7.9 percent a year compared to 3.5 percent for North Africa and 6.3 percent for emerging countries in general. Outbound tourists from sub-Saharan Africa grew by 7.2 percent annually.

Johannesburg is the only African city handling more than 10,000 long-haul air passengers daily, said Airbus strategic marketing director Andrew Gordon quoting an industry report. By 2032 Johannesburg’s share is expected to grow to 50,000 and there will be at least more cities on that list. Passenger numbers are there, but in most cases the expertise is lacking to benefit from them, the report said.

Low cost carriers could generate local growth, according to the report. Yet Africa, with 8 percent of market share, has the lowest of any region when it comes to low-cost carriers. This compares to 39 percent market share for low-cost carriers for Europe, 33 percent for Latin America, 28 percent for North America and 20 percent for the Middle East.

International Air Transport Association figures released this week show that Gulf airlines aren’t just picking up African passenger traffic. Air freight carried by African airlines grew 2.9 percent in April, compared to 1.1 percent the previous year.

Middle Eastern carriers, however, reported an 8.7-percent growth in demand for air freight and 8.1-percent growth in capacity. IATA said: “Carriers are benefiting from the upswing in developed economies, and increased volumes from emerging markets in Asia and Africa.”

Airbus is an aircraft manufacturer based in a suburb of Toulouse, France, with production and manufacturing in the U.K., France, Spain and Germany. The company produced 626 airliners in 2013.