Airlines start lining up for Africa take-off
By Jeremy Lemer
Published: August 17 2010 18:14
Last updated: August 17 2010 18:14
The football World Cup is over, the vuvuzelas have been consigned to the dustbin and fans have turned their attention from Africa to Brazil, host of the 2014 contest. But for one group at least, the continent remains in sharp focus: international airlines.
According to the International Air Transport Association, airlines increased the amount of flying capacity to and from Africa by 8.6 per cent over the year to the end of June compared to 2009, more than any other region except for the Middle East.
While US and European airlines have been cautiously adding capacity to Africa for years, the drive has picked up in intensity in recent months, leading industry executives to talk of a new “scramble for Africa” as airlines position themselves for the future.
Executives point to high growth levels that suggest an increasing need, and ability to pay, for travel by air. Africa’s real gross domestic product was $1,600bn in 2008, having grown 4.9 per cent per year since 2000 – more than twice as fast as in the 1980s and 1990s.
Much of that can be put down to Africa’s large mineral reserves – which have become a focus of fast-growing Asian economies. Traffic between Asia-Pacific and Africa is forecast to grow at 9 per cent per year over the next decade according to some estimates.
US and European airlines are also boosting their connections to resource-rich regions. In June, Delta Air Lines started a service between Atlanta and Accra and aims to add services to Liberia, Angola, Equatorial Guinea, and Kenya in the near future.
Lufthansa, Europe’s biggest airline group and a key provider to Africa, has ramped up its connections, adding two new services in west and central Africa and expanding several more since 2008. The group now has 222 flights a week to 33 destinations in Africa.
A recent report by McKinsey Global Institute, entitled Lions On The Move, suggests that the economic foundations of Africa’s recent success are broader and therefore will have more “staying power”.
Natural resources accounted directly for only a quarter of Africa’s GDP growth over the decade while “the rest came from other sectors, including wholesale and retail, trade and transportation, telecoms and manufacturing”.
Indeed, Airbus, the European aircraft maker, predicts the recent aviation ramp-up will be sustained. Over the next 20 years the amount of filled capacity on flights between Africa and other parts of the world will grow at 5.6 per cent each year, albeit from a low base.
“There is a lot of money in Africa right now,” says Glen Hauenstein, head of network planning at Delta Air Lines, the world’s largest airline by revenues. “GDP is small in absolute terms but it is rapidly expanding as political stability spreads.”
In this newly competitive environment, US airlines are playing catch-up. While European carriers have offered direct services for decades, non-stop flights from North America to Africa have traditionally been limited, and slumped after the industry recession following the September 2001 terrorist attacks.
Mr Hauenstein says Delta began experimenting with flights to Africa in 2006 with a connection between its hub in Atlanta, Georgia, and the tourist destination of Johannesburg in South Africa, via Dakar, Senegal.
The success of that route has led Delta to try others, with an emphasis on west and sub-Saharan Africa where avoiding European connections can save US travellers time.
Part of the problem was aircraft technology, says Greg Hart, vice-president of network strategy at Continental.
Until the Boeing 777 was developed in the mid-1990s, many destinations in Africa were too far from the US for direct connections, and even then the 777 was too big to make some routes profitable. With the arrival of Boeing’s much delayed 787, due around the turn of the year, Mr Hart says that many airlines will for the first time have the right aircraft for the job. Continental plans to connect the energy capitals of Houston and Lagos with a service starting in November 2011. Still, considerable obstacles must be overcome.
According to a 2009 World Bank report on Africa’s aviation infrastructure, while the continent is fairly well served by airports, lack of taxi-ways and terminal facilities and “inadequate” air traffic control systems are limiting capacity growth.
Safety is another concern. Last year, Africa had the worst record of any region, according to Iata statistics. While most problems relate to aircraft operated by local airlines, several reports have blamed Africa’s weak regulatory oversight, which raises wider issues.
In response, airlines have worked closely with government authorities and spent time and money to upgrade local infrastructure for their new services. Continental will help to upgrade the electrical facilities in Lagos airport to receive the Boeing 787.
In spite of those hurdles the airlines remain confident that the efforts will pay off. “The 787 is going to be the pride of our fleet and we are going to put it into Africa. That speaks volumes of our level of interest,” says Continental’s Mr Hart.
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