Why African airlines are costly

It was predicted that over the period 2010-2015, Africa will be the third fastest-growing region in the world in terms of international traffic with an average growth rate of 6.1 per cent compared to the global average of 5.8 per cent and 7.9 per cent and 6.9 per cent for the Middle East and Asia Pacific, respectively.

Those of Europe, Latin America and North America are projected to record lower international passenger growth of 5.0 per cent, 5.8 per cent and 4.9 per cent respectively.

This trend is expected to continue in the coming years due to a number of factors, notably robust economic growth, demographic boom, increasing urbanisation and emergence of the middle class.

Air transportation plays a vital role in a country’s growth process by accelerating convergence of goods and persons.

The contribution of air transport far exceeds that of road transportation sevenfold. Growth in air transportation has directly been mapped into economic growth due to spillover effects through creation of direct and indirect jobs in the industry and other auxiliary sectors such as tourism and other service sectors. Expansion in air transportation creates market opportunities for local entrepreneurs by creating regional and global economic centers.

In 2010, the aviation industry in Africa supported about 7 million jobs (including 257,000 direct jobs) through the impact on travel and tourism, which translated into $67.8 billion of the continent’s Gross Domestic Product (GDP). Forecasts indicate that the aviation industry’s impact on African economies is set to grow. Over the next 20 years, implied job creation by the industry is projected at 879,000.

Africa can maintain the growth of its aviation industry if more and more people can afford to pay for the cost of air travel. Currently, only 10 per cent of Africans travel by air, but given the current rate of economic growth and emergence of the middle class, there can be high demand for services linked to air transportation. In recent years, growing alliances with counterparts in other regions of the world have played an important role in the development of the African aviation industry.

These alliances have permitted African companies to gain access to new long haul routes resulting in higher economies of scale and skills exchange. But Africa is massive, encompassing about 11.6 million square miles, or 30 million square kilometres. That’s three times larger than the United States.

The vast distances between countries become quite real for those who travel regularly from one region to another, and they are only compounded by poor infrastructure. Many roads are either unpaved or crumbling outside of urban areas and rail service is scant. To navigate the country, flight is the only realistic option. In Africa, aviation is a deeply troubled industry. According to a report from the World Bank, the continent “has less than 1 per cent of the global air service market despite having more than 12 per cent of the world’s population.”

The rapid expansion in Africa’s aviation industry is hampered by many factors. Poor record of safety and security, lack of adequate resources and infrastructure, distance and limited connectivity, lack of regulation and government actions, are among the main constraints the industry is facing. These constraints add to competition and high operating costs resulting from surging oil prices. Addressing these challenges could significantly unlock the industry’s potential for future growth.

Aviation security expert and former Commandant, Murtala Muhammed Airport, Lagos, Group Capt. John Ojikutu (rtd), said safety is the most pressing

challenge facing the aviation industry in Africa.

He disclosed that in 2011, the average number of air traffic accidents was nine times higher than the global average. The frequency of accidents stems largely from inconsistency in the implementation and enforcement of internationally accepted safety standards and practices. Increasing the level of safety should be a key priority for the development of the African aviation industry.

Meanwhile, the African authorities have endorsed an African Union-backed plan aimed at addressing deficiencies related to aviation safety and security and strengthening the regulatory framework.

Accordingly, the International Air Transport Association, in conjunction with the International Civil Aviation Organisation (ICAO) and other organisations have committed to supporting the Africa Strategic Improvement Action Plan of the African Union. The plan encourages African governments to foster regulatory oversight through the adoption of globally accepted safety and security standards.

The air transport industry faces various challenges, including poor airport infrastructures, lack of physical and human resources, limited connectivity and lack of transit facilities. Although substantial progress had been made during the past decade, Africa still lags behind other regions in terms of “soft” and “hard” infrastructure. It is therefore critical that African countries invest in the soft, as well as hard

infrastruc ture, to support the industry.

Despite the growing awareness of the role that the aviation industry could play in the development of the continent, the industry is still not the top priority of African governments. Despite increased liberalisation of the African aviation industry and the growing presence of foreign companies, some African governments are still reluctant to open their skies fearing foreign competition could undercut national airlines, some of which are short of commercial viability besides being just symbols of sovereignty.

These challenges require governments to enhance regulation of aerospace management, consumer protection and safety of airlines. Lack of aviation experts and skills, high airport taxes and fees, the weak connectivity and restrictions on transit visas and facilities add to the menu of impediments affecting Africa’s aviation.

Once African countries open up their policies to ease air traffic, ramping up consumer demand will become paramount. As it stands, passengers have reason to avoid African carriers; the continent is home to some of the most expensive airfares on earth. Aviation officials including International Air Transport Association (IATA) CEO, Tony Tyler and African Airlines Association (AFRAA) Secretary- General, Elijah Chingosho, noted recently that these problems are rooted in psychology; state officials simply don’t see aviation as a high-priority industry, perceiving it instead as a luxury. In that context, air traffic becomes little more than an opportunity to pinch some extra revenue.

African airfares are subject to excessive levies in the form of airport fees, jet fuel taxes, excise duties and more.

Fuel prices are particularly hardhit. An AFRAA report last year noted: “Globally, fuel accounts for about 36 per cent of an airline’s operational cost whilst in Africa this ranges from 45 to 55 per cent.

Fuel prices at some stations in Africa are over twice the world average.” Then there are passenger taxes. An international traveller landing at Ambouli, Djibouti, should expect to pay up to $85.89 in extra fees, the highest on the continent. In Accra, Ghana, it’s $75. In Nairobi, Kenya, it’s $40. Other countries airports’ fees around the world are far less. At Charles de Gaulle in Paris, taxes and charges don’t reach $14. In Singapore, they amount to about $11. Mumbai boasts charges of less than $6. A frequent traveller, Michael Adeosun, said: “It’s very expensive and unnecessarily so.

A two-hour flight from Accra to Sierra Leone can be between $800 and $1,500. It’s ridiculous. Many Africans only fly when there’s a conference and the conference is paying.”

The last frontier for African aviation is safety, which is perhaps the biggest roadblock the continent faces when it comes to attracting new passengers. Africa’s record is bleak compared to the rest of the world. It was home to only three per cent of worldwide departures last year, but suffered 22 per cent of fatal airline accidents, according to data from the Aviation Safety Network. Some said that certain African corporations play it safe by restricting employee travel to just a few trusted airlines.

When these airlines do not have flights to certain destinations or are fully booked, the traveller is left with no choice, but to either risk using an airline with safety perception problems or disrupt business plans,” he said.

In many cases, the latter is what happens. Last year, accidents affected one out of every five million flights on Westernbuilt jet aircraft globally, according to IATA spokesperson Perry Flint. In Africa, they hit one out of every 270,000 such flights. “The African aviation industry is not up to global standards,” Flint said.

“But they’re working on that.” Progress came in the form of the 2012 Abuja Declaration, which set ambitious goals for improved air safety over the next few years. The agreement calls for more international cooperation and adherence to common protocol, like the IATA Operational Safety Audit, which all IATA members must undergo. The benefits of such collaboration are clear.

Of the 25 sub-Saharan countries registered with the organisation, not one experienced a Western-built jet hull loss last year.

Better-connected African countries and regions through a viable air transport industry could be the catalyst that can boost intra- African business, trade, tourism as well as cultural exchange.

Developing the aviation industry may also represent an opportunity to mitigate chronic transport problems faced by the 16 landlocked African countries.