Aviation & Tourism: Clear skies or turbulence ahead?
Orville and Wilbur Wright, commonly known as The Wright brothers, were two American inventors who arguably pioneered the aviation industry by inventing and flying the world’s first airplane in 1903. Although the first flight only lasted twelve seconds, the vision of the Wright brothers and other inventors inspired and developed an industry that would take transportation to unprecedented heights.
aviation is one of the fastest growing sectors, particularly on the African continent. The Air Transport Action Group (ATAG) lists aviation as being responsible for close to 63 million jobs globally in 2014, directly contributing $2.7 trillion to the world GDP. In 2015, airlines around the world carried nearly 3.6 billion passengers. Economic benefits of aviation not only include employment, but a plethora of industries: world trade, manufacturing companies, commercial aircraft operators, airports, air navigation service providers and sustainability of other economic sectors.
Air transport is essential for tourism in Africa. With 54% of international tourists travelling by air, it encourages economic investment, improving innovation and efficiency in business and international cooperation. Many remote areas are still inaccessible by rail or road and can only be accessed by air, making it a vital lifeline to regions for tourism revenue and essential supplies like healthcare.
ATAG announced, “In 2034, there will be over 5.8 billion global passengers and aviation will support 99 million jobs, or $5.9 trillion in economic activity. However, if growth were to slow by just 1%, the total number of jobs supported by the air transport sector (including tourism) would be 10.5 million lower and there would be a $690 billion lower world GDP, with $350 billion potentially lost through lower tourism activity”. Of the 6.9 million jobs supported by aviation across the African continent, 428 000 are within the industry itself and the rest are supported as part of the industry’s supply chain and tourism sector.
Tourism relies so heavily on aviation that without it, economic growth would be impossible, particularly in developing countries. Consider remote islands such as Mauritius. In 2017, the number of tourist arrivals increased by 6.1% to reach
1 360 000 p.a., with tourism earnings increasing by 5.2% at Rs 58.8 billion. The Bank of Mauritius is forecasting tourism earnings at Rs 61.6 billion for 2018. Mauritius’s main sources of tourists include France, the UK, Germany, South Africa and India. Without air travel, the numbers would decrease dramatically, with travel by sea being far too time consuming. Since 2005, aviation in Africa was dominated by ten countries: South Africa (17.2 million passengers in 2015), Egypt (10.2 million), Ethiopia (7.1 million), Morocco (6.8 million), Algeria (5.9 million), Kenya (4.9 million), Tunisia (3.5 million), Nigeria (3.2 million), Libya (2.6 million) and Mauritius (1.5 million). Passenger growth in that period was highest in Nigeria, with a 331% increase and although Ethiopia is the third biggest market, it enjoys the second high-
est growth at 324%. In 2015, these numbers captured 85% of the market out of 74 million passengers travelling to and from Africa. Moving forward, the fastest growth rate of passengers is predicted to be in countries such as Ethiopia, Gambia, Côte d’Ivoire, Malawi, Mali, Mozambique, Rwanda, Senegal, Sierra Leone Benin, Chad, Tanzania, Togo, Uganda and Zambia – all posing to increase more than 7.2% and doubling their market every decade.
Numbers recorded in 2015 indicate that passenger traffic from only 25 African countries represent 97.7% of the entire aviation market in Africa – meaning the other 29 countries are practically dormant in the market. These figures highlight why Africa currently only owns 2% of the global aviation market, despite having a population mass of over 1.2 billion people, or 16% of the world population.
It is evident that there is enormous potential for growth. Many African countries are not yet reaping the economic rewards from tourism. Of course, political and economic challenges are hurdles, including mismanaged heavily state-controlled national carriers. Lack of funding has resulted in many airlines accrueing huge debt, when considering the high cost of purchasing and maintaining aircraft and airports. A single-aisle aircraft, like the Airbus A320 or Boeing B737-800 costs around $98 million. Wide body aircrafts, like the Airbus A350-800 and Boeing 7879 Dreamliner each cost roughly $270 million.
In a highly competitive environment, African national carriers have to face large global airline companies, including Lufthansa from Frankfurt and Air FranceKLM, which cover roughly 40 African cities. Emirates flies to 22 African countries via Dubai, including South Africa, Morocco and Mauritius. Low-cost airlines entering the market are challenging the large brands; for example, South Africa’s Kulula and Tanzania’s Fastjet airlines. After Morocco signed an open skies agreement with the European Union in 2006, European low-cost airlines are also entering the market, such as flydubai, which flies to twelve African destinations, including Egypt and Tanzania.
The 1999 Yamoussoukro Decision was a combined pledge to open up air transport markets in Africa to transnational competition. Only 12 African countries signed the pledge: South Africa, Senegal, Tunisia, Uganda, Algeria, Angola, Ghana, Kenya, Egypt, Ethiopia, Namibia and Nigeria. Unfortunately, progress towards liberalisation has been slow, particularly for passengers flying east to west on the continent. Many travellers still have to fly via major European airports, a time-consuming and costly exercise, which discourages both tourism and trade to regions such as Lagos or Kampala.
The African Airlines Association (AAFRA) is composed of nations of the African Union (AU) and facilitates cooperation between African airlines. The AU launched the Single African Air Transport Market (SAATM) in January this year in Ethiopia, an initiative that combines numerous safety and security regulations. The first mandate under its Agenda 2063 aims to create a unified air transport market and the liberalisation of intra-Africa travel. To date, only 23 countries have signed, including South Africa, Kenya and Nigeria. African carriers transport roughly 18% of international passengers in and out of Africa, whereas foreign airlines are growing their fleets and carry 82% of international passengers.
Ethiopian Airlines – the largest airline in Africa – has commended the AU’s decision to pioneer the anticipated SAATM. According to Tewolde Gebremariam, CEO of Ethiopian Airlines Group, most of the airlines on the continent are “relatively small when compared with the rest of the world airlines” and would benefit from joining forces.
InterVISTAS management consultants released a report in 2014, noting that the liberalisation of air transport restrictions across just 12 African nations would already create 155 000 jobs and contribute $1.3 billion to the GDP. Despite the aviation industry being one of the fastestgrowing industries in Africa, challenges remain. Although visa regulations were created with the intention of curbing human trafficking, the resulting fees and hassles are driving away business and leisure travellers.
Rwanda and Ghana offer visa-free access to certain AU member countries, or alternatively visa on arrival. This hassle-free process has resulted in these areas making the most progress of all African states toward a visa-free Africa for Africans, according to the Africa Visa Openness Report 2017 by the African Development Bank (AfDB). Commissioner of infrastructure and energy, Abou-Zeid Amani believes that intra-Africa travel will be responsible for creating 300 000 direct and 2 million indirect jobs.
"More than 500 million Africans will benefit from this huge, single air market and will help the signatory countries stimulate their economies, further promote trade among themselves, and give a tremendous boost to tourism," she said. The AU is of the opinion that the SAATM will encourage further deregulation of visa restrictions and move towards a common African passport for easier movement and inter-African trade.
Africa’s biggest aviation market, The Airlines Association of Southern Africa (AASA), CEO Chris Zweigenthal highlighted the importance of aviation to
Of the 6.9 million jobs supported by aviation across the African continent, 428 000 are within the industry itself and the rest are supported as part of the industry’s supply chain and tourism sector.
tourism. “The performance of the airline industry, particularly from an international perspective, reflects the performance of the tourism industry, one of the South African Government’s six imperatives for growth,” Zweigenthal explained. “It’s unfortunate that the development and growth of African aviation has been held hostage by the inability of African states to work together to ensure the development of an effective network.” “Competition in the airline industry in Africa is intense and a number of players are increasing their footprint on the continent. Without a talent pipeline, airlines and other aviation businesses face a calamitous future,” he said. The International Air Transport Association (IATA), a global airline industry organisation, predicted that African airlines were posed to make combined losses of $350 million (R4.6 billion) in 2017 – $100 million (R1.3 billion) of it from South Africa’s airlines. The global aviation industry, in comparison, was forecasting a $31 billion net profit. South African Airline SAA currently own approximately 50 aircraft, Egypt Air own 54, Royal Air Maroc own 57 and Ethiopian Airlines operate a fleet of 94 aircraft. Ethiopian is also one of only four airlines in Africa with over 5 million annual passengers. To cope with the increasing demand, some 20 000 new pilots, engineers and technicians will be needed and more than 1 000 new aircraft will be required across the African fleet.
South Africa holds the largest aviation market on the continent, yet the South African airline industry is facing significant challenges. Airlines in the region have a long history of losses, irregular and wasteful expenditure and delays of financial reports. Maintenance of records, property, aircraft equipment and inventory – along with ageing fleets – add to a lack of capital and for many, closure. In South Africa alone, airlines including
Since 2005, aviation in Africa was dominated by ten countries: South Africa (17.2 million passengers in 2015), Egypt (10.2 million), Ethiopia (7.1 million), Morocco (6.8 million), Algeria (5.9 million), Kenya (4.9 million), Tunisia (3.5 million), Nigeria (3.2 million), Libya (2.6 million) and Mauritius (1.5 million). Passenger growth in that period was highest in Nigeria, with a 331% increase and although Ethiopia is the third biggest market, it enjoys the second highest growth at 324%.
1Time; Nationwide Airlines; Velvet Sky and Skywise have all ceased operations in recent years. Volatile exchange rates, incurring debt and capital deficiencies are a serious concern for airline companies. Nigeria recently came out of a recession and the South African economy was rated at junk status by global ratings agency S&P global in 2017. A report by the World Economic Forum shows that although South Africa ranks first in transport infrastructure, it was ranked 17th in the air transport industry cost competitiveness. Out of 37 African countries, South Africa performed poorly in terms of air ticket taxes, airport charges and value-added tax. The country scored in 19th place in visa openness.
IATA reports that the contribution of aviation to the South African economy generates $12 billion, or 3.5% of the national GDP, while sustaining approximately
490 000 jobs, including the tourism sector. Annually, 390 000 aeroplanes take off and land from South Africa’s major airports including OR Tambo, which saw more than 18.5 million passengers passing through in 2014. Air transport in South Africa is responsible for facilitating over $140 billion in foreign investment, $10 billion in exports and around $9.2 billion in inbound leisure and business tourism.
Africa’s Future Aviation Sector
Despite challenges, there are positive signs for African aviation. Developing countries foster economic growth and infrastructure development, injected by the influx of tourists and foreign investment. According to IATA, airline safety in Africa has improved tremendously during the period of 2017. It was the second successive year that the African continent reported zero fatal accidents and no jet hull losses. In a global market, it is vital for
Many African countries are not yet reaping the economic rewards from tourism. Of course, political and economic challenges are hurdles, including mismanaged heavily state-controlled national carriers. Lack of funding has resulted in many airlines accruing huge debt, when considering the high cost of purchasing and maintaining aircraft and airports.
African airlines to adhere to strict global standards, including the IATA Operational Safety Audit (IOSA) and the IATA Safety Assessment (ISSA), as well as ICAO’s (International Civil Aviation Organisation’s) safety standards and recommended practices (SARPS).
IATA has forecast that passenger numbers to and from South Africa will be more than double from 23.6 million in 2016 to more than 54 million by 2036 as a result of the annual growth rate of 4.3% in local and international air travel. The global industry, in comparison, is projected to increase only by 3.5%.
A History of the African Aviation Landscape
For most of previously-colonialised Africa, the onset of the aviation industry began with military influence. The African aviation industry was largely influenced by Europe, where airlines were still partially owned by multiple governments. Prior to independence, the national airlines of Belgium, Portugal, France and Spain served their African colonies with their own national airlines. After gaining independence, each country wanted to represent their independence with their own airline carrying their respective flag.
More than 500 million Africans will benefit from this huge, single air market and will help the signatory countries stimulate their economies, further promote trade among themselves, and give a tremendous boost to tourism." Dr Amani Abou-Zeid, African Union Commissioner for Infrastructure and Energy
A long line of African airlines were mismanaged or given insufficient funding by their respective governments and many were forced into liquidation. Other airlines formed partnerships in order to gain global access to networks and began to offer frequent flyer programmes, slowly gaining recognition and success in a very volatile industry. Examples of global airline networks include SAA, a member of Star Alliance since 2006; Kenya Airways, a member of SkyTeam since 2007 and Ethiopian Airlines, a member of Star Alliance since 2011.
Kenya Airways was established in 1977 after the East African Community was dissolved and East-African Airways was disbanded. By 1997, Kenya Airways took delivery of the first new Boeing 737-300 aircraft for the purpose of domestic and African regional travel. In 2006, Kenya Airways had won the ‘African Airline of the Year’ Award for the fifth time in seven years and in 2011 the airline had carried 3 million passengers. The airline is currently focused on expanding the fleet to 107 airplanes and increasing its destinations to 115 by 2021.
Ethiopian Airlines has become one of the continent’s leading carriers that is both profitable and boasts a network including Africa, Europe, North and South America, Middle East and Asia. Its "Vision 2025" growth strategy is to become the leading aviation group in Africa, and the airline has received multiple awards. In 2016, Ethiopian was the first airline in the world to fly the Airbus A350XWB aircraft in Africa and the first African airline to purchase these new aircraft.
In South Africa, Union Airways Ltd was the first civil airmail service, pioneering commercial aviation in South Africa and leading to the formation of South African Airways (SAA) in 1934. In 1952, Johannesburg opened Jan Smuts International Airport (now OR Tambo International). By the 60s, SAA had already carried more
The performance of the airline industry, particularly from an international perspective, reflects the performance of the tourism industry, one of the South African Government’s six imperatives for growth.” Chris Zweigenthal, CEO, Airlines Association of Southern Africa.
South African Airline SAA currently own approximately 50 aircraft, Egypt Air own 54, Royal Air Maroc own 57 and Ethiopian Airlines operate a fleet of 94 aircraft. Ethiopian is also one of only four airlines in Africa with over 5 million annual passengers. To cope with the increasing demand, some 20 000 new pilots, engineers and technicians will be needed and more than 1 000 new aircraft will be required across the African fleet.
than a million passengers and purchased 41 new aircraft from Airbus for $3.5 billion – the largest jetliner acquisition Africa had seen. During this period, South Africa was reinstated as a member of the International Civil Aviation Organisation and the global Star Alliance for worldwide air travel.
Recent aviation developments across the continent
Despite infrastructure challenges, the majority of airports, aircraft and technology are being upgraded in Africa in order to accommodate the growing demand. Senegal’s brand new international airport opened in 2017 as the country aims to position itself as a 21st Century regional air hub. Other major airports undergoing upgrades include Cape Town international airport, which is constructing new runways at a cost of over R3,2 billion and a R100 million international departure lounge and boarding gates. In 2014, Angola spent $2.1 billion on airport construction, while Nigeria airport upgrades cost in the region of $1.07 billion and Cairo $18.5 billion. IATA’s Vice President for Africa, Raphael Kuuchi, believes that it will be vital to address connectivity issues for further growth. “Increased intra-African air connectivity is essential, if Africa is to seize the opportunities for growth promised by its demographic and resources advantages.
“It is absurd that it is possible to travel thirteen times a week from Nairobi to London, yet impossible to travel directly from Nairobi to Dakar. A potential five million passengers a year are being denied the opportunity to travel, trade and spread economic and social development,” Kuuchi says.
Nigeria’s national carrier has had a dismal history; however, Aviation Minister, Hadi Sirika is in process of reviving the airline, assuring sceptics that the project is a priority on the national agenda. The president of travel specialist Sabre West Africa, Gbenga Olowo, proposed that the government should merge the remaining local airlines into three main carriers to be able to compete in the international market.
The cost of jet fuel will continue to rise as the Dollar strengthens against many African currencies and many airlines are now investigating using bio-fuel, which is
In South Africa alone, airlines including 1Time; Nationwide Airlines; Velvet Sky and Skywise Airlines have all ceased operations in recent years.
more cost effective and less harmful on the environment. Airports will continue to become more automated. Airports Company of South Africa (ACSA) and the general African airline industry are in the process of streamlining self-service checkin and mobile travel management apps. In future, devices will allow passengers to check in their bags from home via a smartphone, and eTag and eTrack GPS and Bluetooth systems will be able to track luggage anywhere in the world. According to IATA, five specific technologies will completely transform the aviation industry in years to come. These include artificial intelligence (AI), biometric technology, blockchain, remote sensing technology, IATA’s New Distribution Capability (NDC) and ‘One Order’. AI is already being used in multiple industries, including financial institutions, manufacturing and aviation. 14% of airlines and 9% of airports are already using bots for customer service queries. The future of travel will be having a 24-hour bot travel assistant that is able to predict personal preferences and select a user experience based on historical data. In future, 3D printing will also feature as a cost-saving initiative. Studies are currently underway to use 3D printing for manufacturing parts such as seat buckles and brackets, which could significantly reduce cost and weight in an aircraft, burning less fuel and requiring less raw materials for production.
Biometric technology is already a part of everyday life and is aimed at processing passengers rapidly by using iris recognition, fingerprint or face identification. The project is part of IATA’s One ID project, and it matches any of the characteristics mentioned with passport and flight booking data. Passengers will then only need to show identification once. African countries are already using this technology to collect data for security and border control.
Scientists are predicting that global warming will cause in-flight turbulence to become more severe in future due to unstable wind and temperature fluctuations. By the year 2050, intense turbulence could increase over Africa alone by 51%. Turbulence is responsible for hundreds of costly injuries to crew and passengers every year. The industry is in the process of investigating laser technology that could predict turbulence in the flightpath via light pulses. IATA is also in the process of creating a knowledge-sharing platform for pilots and air traffic control to gather real-time data and weather warnings. Blockchain is another technological advancement aimed at streamlining secure payment processes for bookings and removing unnecessary steps to cut costs. NDC and One Order is a technology that will use a modern XML-based internet language standardised between airline websites and airline ticket distribution systems. The systems will be able to personalise passenger purchases and collect
Kenya Airways was established in 1977 after the East African Community was dissolved and East-African Airways was disbanded. By 1997, Kenya Airways took delivery of the first new Boeing 737-300 aircraft for the purpose of domestic and African regional travel. In 2006, Kenya Airways had won the ‘African Airline of the Year’ Award for the fifth time in seven years and in 2011 the airline had carried 3 million passengers.
data for travel agents to tailor-make packages.
Drone technology will impact the future of aviation in multiple ways. Rob Eagles, director of air traffic management infrastructure at IATA believes that unmanned aircraft systems (UAS) – or drones – will be used to transport passengers in future. "Our goal is to facilitate this new branch of aviation by developing standards to support safe, efficient, orderly, reliable and sustainable high-frequency drone operations into the airspace system. The question is not ‘if’ anymore, but ‘when’" says Eagles.
Céline Hourcade, head of cargo transformation at IATA refers to trials already being carried out for airport surveillance, bird control, deliveries and humanitarian aid all using drone technology. "Existing and new aircraft manufacturers are all working on unmanned aircraft projects," says Hourcade. She identifies three main aspects of aviation that hold uncapped business potential, including transport of passengers, transport of goods and ground operations. "Drones could unlock communities without transport infrastructure and could be cost-effective alternatives to traditional aircraft," says Hourcade. "This is an opportunity for our member airlines to capture new markets, open new routes, reduce costs and increase revenues." Aviation is a catalyst for growth and development on the African continent. Rising costs of fuel, labour and technology are risks to profitability, but the benefits of the air transport industry are essential to any economy for tourism, trade and investment to flourish. It is imperative that governments work together to liberalise connectivity and minimise restrictive regulations and unreasonable taxation to encourage tourism and build infrastructure, while partnering with global governing bodies to maintain networking relationships. There is no doubt that there will be turbulence ahead in African skies, but a clear forecast is on the horizon.
“It is absurd that it is possible to travel thirteen times a week from Nairobi to London, yet impossible to travel directly from Nairobi to Dakar. A potential five million passengers a year are being denied the opportunity to travel, trade and spread economic and social development.” Raphael Kuuchi, Vice President, IATA’s Africa.