Interview: Marc Gaffajoli, CEO, Afrijet
Afrijet is a Libreville-based airline operating scheduled services to airports across Cameroon, Gabon, and São Tomé. CEO Marc Gaffajoli spoke to African Business about the company’s experience over the last year and the future of the African airline industry How was last year in terms of demand and passenger numbers?
The year 2020 was terrible. After a promising start to the year and double-digit growth, we had to deal with a four-month ban on any activity and five months of severe restrictions due to the pandemic. In the end, we came out of it with a 55% drop in revenue and a 65% decrease in traffic compared to 2019, which was, admittedly, a very good year. These figures are more or less the average for the industry.
In Africa, there was a higher level of government restrictions on our business, but the traffic was also less volatile than elsewhere. On the African continent, the motive for travelling is often to do with a fundamental need, for family, health or business reasons.
What is the outlook for you for the next 6-12 months?
Afrijet is currently ramping up on a step-by-step basis as the restrictions are eased. At the same time, we are preparing the start of a new phase of expansion for 2022-25 and hope to reap the benefit of the major cost reduction effort that we have made. We have managed to preserve the operational tools and human capital, and we are ready to bounce back.
If you were new to the industry, would you choose to focus on commercial flights, private jets or freight?
If I were new to the industry, I would choose to… not focus! The most resilient business models during this crisis have been those that are built on a balanced portfolio of activities. Since 2016, our strategy has been based on two main drivers: business travel on-demand and regular air travel. That is what has enabled us to survive thus far.
Repatriation flights and charters linked to the pandemic, for example, have been a breath of fresh air for our cash flow at critical times. In early 2021, we launched a third line of services for cargo in the same spirit. We believe in airfreight over the coming decade, particularly due to the development of e-commerce.
The cost of air transport on the continent is still too high; can you see any rapid solutions to making it more competitive and helping the airlines?
Modernise the air travel infrastructure, put an end to the inflation of airport charges, encourage the setting up of African aeronautical maintenance centres, better regulation of travel agents… these are a few areas for the authorities to consider to bring down factors that can make up to 60% of costs.
The airlines also have a role to play – accelerate the digitisation of distribution up to and including their internal processes and work better together to position themselves in the operations/marketing value chain depending on the routes.
How can the regulators help the airline industry and entrepreneurs like yourself?
The lead times for commissioning aircraft are a real problem in Africa. It should be the number one priority for all the regulatory authorities – planes that sit on the tarmac for weeks or even months and the completion of regulatory formalities are real destroyers of value. The inspectors are rarely allocated to these tasks and that makes the process even longer.
The regulators don’t receive enough support from governments, which results in the development of a sort of informal fiscality in the form of billing for services and charges that, in the end, affects the cost of travel.
Is the airline industry working together to make flying in Africa safer, easier and more affordable?
Africa, despite the stereotypes, has had safe air travel for a decade now. Some countries are naturally lagging behind, but the African fleet in general has been greatly modernised, for all types of planes. More and more players, including us, also have IOSA certification, which is acknowledged to be the highest level of safety for air travel.
The question of affordable transport remains an issue, but we should not forget that the main driver of cost reduction is the volume of passengers. With only 2.5% of global traffic happening on the continent, we don’t have the large economies of scale of other regions. ■