Unserved routes: Can Pan-African airline group plug the gaps?

While pan-African airline, Air Afrique, is no longer with us, the current aviation market is dominated by non-African airlines. WOLE SHADARE writes that the continent’s carriers can synergise to fill the gap to provide efficient air transportation

Slow pace

Africa is a rapidly growing continent with a population of well over a billion. Its landmass is around three times larger than Europe’s and is home to some of the planet’s most packed conurbations.

Despite an extraordinary population surge over the last 50 years, Africa’s aviation network has failed to keep pace.

Those wishing to fly between Nigerian megacity Lagos and the Egyptian capital of Cairo must settle for a single daily direct flight – and on some days, none at all.

This is the level of service between two metropolises that rank first and second on the list of the most populated cities in Africa, with a combined population of more than 20 million.

Poor connectivity

The same can be said of routes linking the continent’s other large cities. There are no direct flights between Algiers and Kinshasa, the capitals of Algeria and the Democratic Republic of Congo, nor can you reach Johannesburg in South Africa from Casablanca in Morocco without changing planes. These make up the six largest urban agglomerations in Africa, yet to reach many of them requires awkward stopovers in the Middle East or Europe, adding hours to the journey.

Africa’s size offers significant scope for air services, so why are these routes not being served, and could a pan-African airline group plug the gap?

It is worth noting that Africa has already had a pan-continental carrier. Air Afrique was founded by 11 states (Benin, Burkina Faso, the Republic of the Congo, Central African Republic, Côte d’Ivoire, Chad, Togo, Mali, Mauritania, Niger and Senegal) in 1961 and operated until 2002, when a combination of financial problems and the competing interests of different shareholders triggered its collapse.

The now-defunct airline, which was headquartered in Abidjan, Ivory Coast, served as an important tool for economic development in Africa, carrying hundreds of thousands of passengers a year on an eclectic mix of aircraft, including Airbus A300, A310s, B707 and 737s, before bankruptcy saw it cede routes to Air France and others.

SAA, Kenya Airways’ deal

A possible return to the Air Afrique model of multinational alliances still remains valid for Africa and is achievable as moves towards something resembling an intra-continental carrier were made in September 2021 when two of its major players, Kenya Airways and South African Airways (SAA), signed a strategic partnership framework with the aim of co-starting a “pan-African airline group” by 2023, “taking advantage of strengths of the two airlines’ busy hubs”.

The envisioned Pan-African airline group began in November 2021 as a collaborative initiative between Kenya Airways and SAA. The two carriers started taking steps into a strategic alliance and later voiced the desire to eventually take in other African carriers and create a Pan-African airline group, and scale up

The deal, which has the support of both countries’ governments, includes shared services of route networks and fleet and capacity deployment, which include economic, technical, maintenance and repair tie-ups to achieve savings for both airlines.

The partnership aimed to leverage assets, flex combined buying muscle, and create a formidable air transport connection in Africa, benefiting from at least two attractive hubs – Johannesburg and Nairobi.

A report by Lufthansa Consulting and the African Airlines Association (AFRAA), a Nairobi, Kenya-headquartered trade association, showed that in 2019 (pre-pandemic), the diminutive African aviation market had about 200 million seats, compared with 2.1 billion in Asia, 1.8 billion in Europe and 1.5 billion in North America.

Experts’ views

An airline expert who pleaded anonymity said the partnership between SAA and Kenya Airways a few years ago was a great opportunity that presented itself to the airlines to tackle a majority of air transport issues in Africa. It is not clear whether the two  African airlines are still forging ahead with what promises to be a game changer in the African aviation sector.

He said, “While other markets have consolidated their aviation assets with one or two big operators, African airlines remain fragmented. African airlines are competing among themselves instead of cooperating; little wonder African airlines have been recording losses.

“By working together, we would be able to increase passenger traffic, cargo opportunities and general trade by taking advantage of strengths in South Africa, Kenya, and Africa.”

The partnership would improve the financial viability of both airlines, and customers would benefit from more competitive prices.

The deal marks a remarkable, if still fragile, turnaround for SAA, which rose from the near-dead in September, having been grounded for a year following persistent financial difficulties that were compounded by the pandemic.

The slimmed-down flag carrier was granted a renewed operating licence by the regulator, the South African Civil Aviation Authority, in August 2021 before resuming flights on a select number of domestic routes, as well as linking its hub in Johannesburg with a handful of international destinations including Accra, Harare, Kinshasa, Lagos and Lusaka.

A report in Kenyan online business news service businessdayafrica.org in 2024 says that discussions had resumed between Kenya Airways and South African Airways on the creation of a Pan-African airline group, following the collapse of the agreement with the Takatso consortium, which was to recapitalise SAA in return for a 51% share in the airline.

The article says that executives from Kenya Airways visited South Africa in March at the invitation of SAA to chart a new course and establish fresh timelines for the long-anticipated Pan-African airline group’s formation.

Challenges

The majority of African countries have been underserved for decades, in part because of protectionist behaviour by some national governments and regulators. There has also been a focus on more lucrative intercontinental routes instead of domestic and regional service development.

Compounding the problem has been a lack of co-operation between carriers, though with the economic shock brought by recession, airlines have shown a greater willingness to form alliances to lower operating costs and increase revenues and connectivity. This is evidenced through the SAA and Kenya Airways deal, but also through a codeshare agreement signed in October 2021 between RwandAir and Qatar Airways, to offer travellers more choice across Africa, with the Rwandan flag carrier also launching non-stop flights in December 2022 between its Kigali hub and Doha. Passengers are already benefitting from seamless ticketing, check-in, boarding and baggage services.

A former Assistant Secretary-General of Airline Operators of Nigeria (AON), Mohammed Tukur said airline expansion across the continent continued to be hampered, but there was cause for optimism.

“There are several factors that have prevented airlines from opening more routes in Africa. Flying is expensive. Fuel costs, lease costs and financing costs can often be much higher than in other parts of the world, limiting the ability of airlines to expand in a financially sustainable way. High price sensitivity among the passenger pool doesn’t help either.”

Stakeholders highlighted more than 200 “unequal taxes” that were causing financial and administrative burden. They noted that the continued presence of underperforming state-owned carriers, sometimes supported by unsustainable subsidies, suppressed expansion.

Add to this is infrastructure constraints, such as small airfields or a lack of night-time operations, the often fragile diplomatic relations between nations, cultural mismatches, and the possibilities for airlines to grow are further limited.

Opportunities

Africa’s population represents around 17% of the global total, yet its air transport accounts for less than a 3% share according to AFRAA. In financial terms, African airlines haven’t collectively recorded a profit since 2010, in contrast to international carriers, many of whom chartered a recovery from the 2008 global crash, the trade association noted.

Pan-African virtual airline

Last line

Amid the gloom, there are real opportunities for significant growth, especially from such a low base. For starters, there is a young, rapidly urbanising population (Africa is among the fastest-growing continents), making it an attractive prospect for foreign investors, and AFRAA estimates traffic will double within the next 20 years.

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