Air trans­port re­forms needed to un­lock full po­ten­tial

Africa Renewal - - Contents - By Masimba Tafirenyika

Africa flies on a wing and a prayer

Un­til re­cently, it was not un­com­mon for pas­sen­gers fly­ing be­tween two African cities to tran­sit through Europe. It was cheaper and faster, for in­stance, for pas­sen­gers trav­el­ling to Ethiopia from Côte d’Ivoire to fly first to Paris with Air France and then catch a con­nect­ing flight to Addis Ababa. With no di­rect flights link­ing their cap­i­tals, most African coun­tries had to rely on flights from their for­mer colo­nial pow­ers to con­nect to each other. It still hap­pens to­day but on a smaller scale; fly­ing in Africa is im­prov­ing, al­beit slowly.

Yet poor safety records con­tinue to be­devil its avi­a­tion in­dus­try, thanks to low stan­dards, in­ert su­per­vi­sion and old and poorly main­tained planes. The air­ports too suf­fer from poor main­te­nance and of­fer shoddy and expensive ser­vice, says the In­ter­na­tional Air Trans­port As­so­ci­a­tion (IATA), the global air­lines group. While rev­enue from air­ports and air traf­fic is prob­a­bly ad­e­quate to fi­nance es­sen­tial in­vest­ments, pol­i­tics and weak man­age­ment are in­ter­fer­ing with how the money is used.

Still, a ma­jor study* by a con­sor­tium of or­ga­ni­za­tions led by the World Bank con­cluded that gen­er­ally the ca­pac­ity of air trans­port in­fra­struc­ture “is not a se­ri­ous prob­lem.” The 2009 study, Africa’s In­fra­struc­ture: A Time for Trans­for­ma­tion, said the num­ber of air­ports was ad­e­quate and there were enough run­ways to han­dle traf­fic. It noted, how­ever, that while African car­ri­ers are up­grad­ing their fleets, progress with air traf­fic con­trols re­mains slug­gish.

Poor in­fra­struc­ture un­doubt­edly adds to huge run­ning costs. Air­ports are of­ten stuffed with high-charg­ing mo­nop­oly sup­pli­ers, in ad­di­tion to other govern­ment taxes, says IATA. For ex­am­ple, Sene­gal in­creased its land­ing charges by 13% in 2012 on top of an air­port devel­op­ment fee of about $68 per pas­sen­ger—the high­est in Africa. Crit­ics say some African coun­tries are less trans­par­ent with how they use the money from these charges. Several other coun­tries have devel­op­ment charges of up to $50 per pas­sen­ger.

Brain drain amid grow­ing staffing needs

There is lit­tle relief from air­port op­er­at­ing costs: fuel taxes are high, so are land­ing and take-off charges. For ex­am­ple, fuel prices in Africa are on av­er­age 21% higher than the global av­er­age. Worse still, Africa has the high­est air­fare costs in the world per kilo­me­tre, pushed up partly by high taxes and partly by lack of com­pe­ti­tion or rel­a­tively low air traf­fic vol­umes on many routes.

Be­cause of poor safety records, African air­lines of­ten face higher leas­ing costs than other car­ri­ers. Ac­cord­ing to The Econ­o­mist, a Euro­pean air­line, for ex­am­ple, could be charged $180,000 a month to lease a five-year-old Boe­ing 737, but a Nige­rian car­rier could be slapped with a bill of up to $400,000.

The con­ti­nent’s avi­a­tion in­dus­try fur­ther suf­fers from lack of skilled per­son­nel, wors­ened by a brain drain that has seen pi­lots and tech­ni­cians join­ing air­lines with bet­ter bot­tom lines. Boe­ing, a US air­craft man­u­fac­turer, es­ti­mates that Africa will need 14,500 new pi­lots and 16,200 tech­ni­cians through 2031, ac­cord­ing to IATA.

“African air­lines have to raise their game and their re­mu­ner­a­tion pack­ages to re­tain pi­lots, en­gi­neers, cabin crew, and air­line man­agers,” says Mike Hig­gins, IATA Re­gional Vice Pres­i­dent for Africa. Ethiopian Air­lines, for in­stance, is han­dling

it cre­atively. “In­stead of com­plain­ing, why don’t we train enough peo­ple not only for our air­line but also for the re­gion?” Te­wolde Ge­bre­mariam, the air­line’s chief ex­ec­u­tive of­fi­cer told Air­lines In­ter­na­tional, an IATA pub­li­ca­tion. His air­line has ex­panded in­take at the Ethiopian Avi­a­tion Academy in Addis Ababa from 200 to 1,000 stu­dents per year.

Not­with­stand­ing the litany of prob­lems it is con­fronting, Africa’s avi­a­tion in­dus­try is be­gin­ning to pick up, boosted by the con­ti­nent’s eco­nomic growth. “Nowhere is the po­ten­tial for avi­a­tion greater than on the African con­ti­nent,” Tony Tyler, head of IATA, told par­tic­i­pants at the group’s an­nual meet­ing last year in Cape Town, South Africa. The avi­a­tion in­dus­try sup­ports some 6.7 mil­lion jobs in Africa and gen­er­ates $67.8 bil­lion in eco­nomic ac­tiv­ity, says the World Bank-led re­port.

Grow­ing mid­dle class

By 2030, more than half of Africa’s pop­u­la­tion will be liv­ing in the cities and, ac­cord­ing to the African Devel­op­ment Bank, about 700 mil­lion will join the mid­dle class over the next decades. This bur­geon­ing mid­dle class will pro­duce more cus­tomers who will find it more con­ve­nient and af­ford­able to fly than use al­ter­na­tive trans­port. More com­pe­ti­tion among low-cost air­lines and in­creased traf­fic should also re­sult in af­ford­able air­fare.

Es­tab­lished air­lines are also mak­ing prof­its and fly­ing to more des­ti­na­tions. Kenya Air­ways, Royal Air Maroc, South African Air­ways, Ethiopian Air­lines and Egypt Air stand out among the pack. Ethiopian Air­lines, Africa’s fastest grow­ing car­rier, is con­sis­tently ex­ceed­ing its profit tar­gets. In Au­gust 2012, the state-owned but pri­vately man­aged air­line be­came the sec­ond car­rier out­side Ja­pan to op­er­ate the Boe­ing 787 Dream­liner, a state-of-the-art pas­sen­ger jet. It bought ten new 787s with a $1 bil­lion loan guar­an­tee from the Ex­port-Im­port Bank, a US ex­port credit agency.

Africa’s eco­nomic pow­er­house, South Africa, has the most de­vel­oped air trans­port in­fra­struc­ture net­work and avi­a­tion mar­ket in the re­gion. Its three ma­jor air­ports in Johannesburg, Cape Town and Dur­ban got face-lifts ahead of the World Cup in 2010 and its na­tional air­line, the South African Air­ways, is the largest in Africa, with con­nec­tions to over 50 cities across the con­ti­nent.

To re­alise their full po­ten­tial, African gov­ern­ments have adopted a Com­mon African Civil Avi­a­tion Pol­icy. It aims to es­tab­lish a well-in­te­grated trans­port sys­tem that would link air travel to other means of trans­port so that pas­sen­gers and cargo can move seam­lessly—and avoid con­nect­ing trips out­side the con­ti­nent just to travel within the same re­gion.

Arne Hoel/The World Bank

African lead­ers face tough chal­lenges in de­vel­op­ing, up­grad­ing and main­tain­ing the con­ti­nent’s in­fra­struc­ture for trans­port, en­ergy, wa­ter and in­for­ma­tion and com­mu­ni­ca­tion tech­nol­ogy. De­spite ef­forts by gov­ern­ments and the pri­vate sec­tor to pump money...

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