Zambia among African Countries Expected To Double Its Air Travel Passengers by 2036 - IATA
The International Air Transport Association (IATA) expects 7.8 billion passengers to travel in 2036, a near doubling of the 4 billion air travelers expected to fly this year. The prediction is based on a 3.6% average Compound Annual Growth Rate (CAGR) noted in the release of the latest update to the association’s 20-Year Air Passenger Forecast.
IATA stated in Geneva that many of the fastest-growing markets are achieving a compound growth rate of more than 7.2% per year, meaning their market will double in size each decade. Most of these markets are in Africa, including: Zambia, Sierra Leone, Benin, Mali, Rwanda, Togo, Uganda, Senegal, Ethiopia, Ivory Coast, Tanzania, Malawi, Chad, Gambia and Mozambique.
"All indicators lead to growing demand for global connectivity. The world needs to prepare for a doubling of passengers in the next 20 years. It’s fantastic news for innovation and prosperity, which is driven by air links. It is also a huge challenge for governments and industry to ensure we can successfully meet this essential demand," said Alexandre de Juniac, IATA’s Director General and CEO.
The five fastest-growing markets in terms of annual additional passengers in 2036 compared to 2016 will be China (921 million new passengers for a total of 1.5 billion), US (401 million new passengers for a total of 1.1 billion), India (337 million new passengers for a total of 478 million), Indonesia (235 million new passengers for a total of 355 million), Turkey (119 million new passengers for a total of 196 million).
Planning for growth will require partnerships to be strengthened between the aviation industry, communities and governments to expand and modernize infrastructure. Runways, terminals, and ground access to airports will come under increasing strain. Innovative solutions to these challenges, as well as to the baggage and security processes, cargo handling, and other activities, will also be needed. And air traffic management needs urgent reform to cut delays, costs and emissions, stated IATA.
Zambia is well positioned for the air travel boom
The Zambian government has signaled to the market its intention to re-introduce the Zambia Airways Brand back onto the Zambian Air transport market. It has however not made known the strategy it will employ to deal with the three biggest determinants of airlines success; how to hedge and manage Jet Air Fuel – JET- A1 engines fuel and lease financing costs for the planes as well as pilot remunerations.
The Honorable Transport and Communications Minister Mr. Brian Mushimba, on 11 Sept. said in an interview that Zambia Airways could be coming back as early as Q1:2018. His Ministry has prepared 3 project appraisal scenarios with detailed net present value – NPV and internal rate of return – IRR calculations for likely viability.
“We have prepared scenarios and submitted numbers to the Ministry of Finance, numbers don’t lie,” he said. Hopefully after the Ministry of Finance see these numbers, we can then present the best option to Cabinet this month of next month for discussion, he said. We could then be thinking financing options by next year Q1.
Zambia has for a long time penalized its tourism potential due to lack of an airline. Local airlines such proflight have cushioned the need, but not completely absorbed international demand. The Southern African nation is spending under a billion in constructing 2 state of the art international airports in Lusaka -$400million- and Ndola – $440million respectively. The Lusaka project completion is expected in December 2019. These plans coupled with resurrection of the national airline will allow Zambia regain its slot as regional hub. Zambia will have the third largest airport in Africa after ORT in Johannesburg and Jomo Kenyatta in Kenya.
There is a ready market for daily flights to all the ten provincial capitals but needs an efficient low cost model so that it can capture the market for top end luxury busses and self-drive vehicle travels, considered to be price sensitive.