Paper: Africa will be a market of 350 million airline passengers by 2035

Minister of State, Aviation, Sen. Hadi Sirika

 

By Alexandre de Juniac; IATA Director General and CEO

 

Air transport is integral to the growth of any modern economy. It connects people, enables business, trade and tourism, links cultures and delivers humanitarian aid where it is needed, which is vital to some regions in Africa.

At present growth rates, the International Air Transport Association (IATA) forecasts Africa will be a market of 350 million airline passengers by 2035.

Aviation in Africa currently supports 6.8 million jobs and contributes $80 billion in GDP. Last year demand for airline travel to, from and within the continent increased 6 percent to 84 million passengers. Over the next two decades passenger demand is set to expand by an average of 5.7% annually. This opens up incredible economic opportunities for Africa’s 54 nations.

Despite aviation’s social and economic benefits, airlines are seeing their profits eroded and margins squeezed. Globally, the average profit per passenger in 2017 will be about US$7.69. In contrast, African carriers are forecast to lose US$1.50 per passenger.

Global and African geopolitical and economic issues are beyond our direct control but the following factors can be addressed and prevented from becoming a further drag on aviation and the economies they support:

Connectivity The strategic importance of intra-Africa connectivity cannot be over-stated. It is invaluable in promoting and supporting the continent’s growth and development. However, the implementation of Africa’s visionary framework for air transport connectivity across the continent, as envisaged in the 1988 Yamoussoukro Declaration, has been slow to the point of almost invisible. The potential benefits are plain for all to see, yet the political will and courage to take Africa’s air transport network into the 21st century has been conspicuously absent.

We welcome the African Union’s plan to create a Single Africa Air Transport Market (SAATM). We have seen too many lost opportunities from an unconnected continent. The SAATM framework has the potential to unlock those economic and social benefits and to transform Africa’s fortunes. Making it a reality requires governments to move

promptly in creating the enabling regulatory framework and for the airlines currently sheltering behind their protection to become competitive.

Blocked Funds

Blocked funds in Africa is an increasing problem with airlines unable to repatriate their foreign currency earnings from Angola, Algeria, Eritrea, Ethiopia, Libya, Mozambique, Nigeria, Sudan and Zimbabwe. Many of those countries are experiencing economic challenges. But blocking airlines’ funds is not the answer. If airlines cannot recover revenues that are essential to covering their costs, they will be unable to provide the connectivity that is so vital to countries’ economic growth.

It is in everybody’s interest to ensure that airlines are paid on time and in full – at fair exchange rates. We have just had success in Egypt which completely cleared the backlog of funds. We appeal to other governments – notably Angola and Sudan – to follow suit with practical solutions in line with bilateral treaties and global standards.

Smarter Regulation

The recent proliferation of regulations across Africa, such as the tourism tax in Tunisia, the planned USD30 improvement fee at Kamuzu international airport in Malawi and the potential increase in charges in in the Republic of Congo (Brazzaville) place an undue burden on airlines and impede aviation’s ability to catalyse economic and social development.

We encourage governments and regulators to adopt IATA’s Smarter Regulation framework to achieve growth-supporting aviation policies and ultimately to boost social and economic development.

IATA’s smarter regulation initiative promotes partnerships with governments that result in clearly defined regulations to serve measurable policy objectives in the least burdensome way.

Safety

Last year, sub-Saharan Africa had its best performance in 10 years with no passenger fatalities or jet hull losses. This is a great achievement, but there is more to be done.

We continue to press African airlines and governments to adopt the IATA Operational Safety Audit (IOSA) system. IOSA measures all airlines’ safety management and related processes against identical criteria and standards, regardless of their size, resources, ownership, areas of operation, etc. IOSA’s contribution to safety in Africa has been significant. The 33 sub-Saharan airlines on the IOSA registry performed nearly twice as well as the non-IOSA airlines in 2016 in terms of all accidents and incidents. They also performed 7.5 times better than non-IOSA operators between 2012-2016. We can sustain this momentum if more governments make IOSA a part of their airline certification process.

In addition, IATA calls on African governments to continue raising their levels of adherence to the UN International Civil Aviation Organization’s (ICAO) global standards and recommended practices. In 2016 only 22 African countries had implemented at least 60% of ICAO’s standards and practices.

We all want a better world. Air transport is the business of freedom at the heart of a virtuous cycle promoting development, opportunity, growth, prosperity and connectivity. Most governments promise their citizens the same. If they are genuinely committed, we should work more closely together.

 

Alexandre de Juniac is the Director-General and CEO of the International Air Transport Association (IATA).

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