Zam­bia among African Coun­tries Ex­pected To Dou­ble Its Air Travel Pas­sen­gers by 2036 - IATA

Zambian Business Times - - BUSINESS REVIEW -

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.

Zam­bia Air­ways Boe­ing - 737 Nk­wazi in Am­s­ter­dam in 1989.

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