• The Africa’s air traffic growth is projected to surpass the global average, reaching 7.4 per cent, with flights already exceeding pre-pandemic levels.
• Airbus anticipates that this growth will drive an annual demand for services worth $7 billion in the region.
• While airlines are steadily recovering, air cargo has rebounded by 31.4 per cent, and air travel is at 93 per cent of 2019 levels.

The aviation industry in Africa is currently experiencing an upward growth trend and presents a positive financial outlook for African airlines in 2023 compared to 2022. Projections indicate that overall air traffic growth in Africa will exceed the global average of 6.1 per cent, reaching an impressive 7.4 per cent, with flights already surpassing pre-pandemic levels.

These revelations emerged during the recently concluded 7th Aviation African Summit & Exhibition, which took place on September 13th and 14th, 2023, in Abuja, Nigeria. This landmark event has been lauded as the most prominent summit, drawing nearly 1,500 delegates from over 75 countries and boasting more than 110 global exhibitors and sponsors.

Under the theme ‘Stepping up for business,’ the event concerned fostering a united and competitive African aviation industry, aiming to build, shape, and advance it collectively.

Aviation industry traffic to double by 2040

Hosted for the first time in West Africa, this inaugural event was a collaborative effort between the Nigerian Civil Aviation Authority (CAA) and Times Aerospace. Beyond its primary objectives, it sought to challenge the existing scenario where Africa, despite representing 18 per cent of the global population, contributes a mere 2 per cent to international air transport market activities, encompassing cargo and passenger services.

During the summit, aviation leaders from various African nations discussed formulating strategies to propel the thriving sector forward. The overarching objective was to enhance Africa’s capacity and capabilities to align with the International Air Transport Association’s (IATA) projection that air traffic is set to double by 2040.

“This is the first time we’ve hosted the summit in West Africa, but it’s not before it’s time. Nine years ago, the first summit was scheduled on the continent, but it proved impossible due to the myriad visa restrictions for intra-African connectivity. Hence, the first summit being hosted in Dubai. However, a year later, Rwanda had completed the process for visas on arrival, thus paving the way for hosting the event for where it needed to be.” Alan Peaford, the Summit Chairman, noted.

Furthermore, he underlined that Africa, particularly West Africa, has been keen to tap into the value that the aviation sector promises. As Africa’s most populous nation, Nigeria and the wider West African region have plenty to contribute to the global aerospace industry and fuel economic growth.

This is despite many challenges, such as geopolitics, poor connectivity, a lack of investment in infrastructure, and a shortage of maintenance, repair, and overhaul (MRO) facilities.

Also Read: Decarbonizing Africa’s Maritime Transport

Single African air transport market

“We’ve seen many new and often repeated initiatives and great ideas on the African continent, but they’ve stumbled through inertia or strong resistance. We must find a way to change this, but it has to be the African way. There are shared goals, but we must recognize these can be achieved differently. We must recognize that those outside the continent benefit from learning the African way.” Peaford noted. Some key themes discussed include aviation finance, MRO, and business aviation.

Secretary General of the African Civil Aviation Commission (AFCAC), Adefunke Adeyemi, emphasized that it’s crucial to remember that the approach to aviation in each African nation is distinct and tailored to their specific needs.

Further, she highlighted the importance of the Single African Air Transport Market (SAATM) in unleashing Africa’s possibilities. Although SAATM officially launched in 2018, implementation has yet to happen despite commitment from 44 countries.

Adeyemi cautioned that if the Single African Air Transport Market (SAATM) is not implemented, Africa could experience an additional economic growth shortfall of $4.2 billion in the next two years.

As 2022 drew to a close, AFCAC initiated its Pilot Implementation Project (PIP) to push forward the implementation of SAATM. A multi-tiered approach was employed in the initial phase to enhance awareness and participation.

Adeyemi explained, “Our current focus is on granting fifth freedom traffic rights, which will stimulate the market differently by providing access to new markets. Since the launch of SAATM PIP in November, we have introduced 11 new fifth freedom routes, with more to follow soon.”

Also Read: Africa’s First Spaceport Set to Position the Continent in the Global Space Race

Transparent investment climate

The Minister of Aviation and Aerospace Development, Mr. Festus Keyamo, highlighted the Federal Government’s aspiration to position Nigeria as the central aviation hub in Africa. He stressed the importance of air transportation as a catalyst for economic progress and a pivotal driver of global socio-economic advancement.

He stressed that continuous efforts to foster collaboration, share knowledge, and promote business growth within the African aviation community would address significant structural challenges within the aviation sector.

This, in turn, would create an environment conducive to attracting foreign investors by establishing a stable and transparent investment climate. Additionally, he advocated for integrating the aviation sector into Africa’s national development plans (NDCs).

Regarding the issue of high airport charges and fuel costs, Lieutenant General Mohamed Abbas Helmy, the Egyptian Minister of Civil Aviation, acknowledged the necessity of raising airport charges to develop infrastructure in response to escalating demand.

He acknowledged the financial burdens African companies face, including higher service prices, which exceed industry averages by up to 8 per cent. Fuel costs account for over 30 per cent of operating expenses, 12 per cent higher than the global average. He clarified that such practices are widespread among international airports.

Next Read: Decarbonizing transport: Exploring e-mobility in Africa.

Transition to the low-carbon aviation industry

He viewed active participation in climate change mitigation as a challenge and a remarkable opportunity for fostering collaborative partnerships and advancing technological innovations.

Regarding sustainable aviation fuel (SAF), which is currently not widely accessible globally and exceptionally scarce in Africa, Dr. Aliu highlighted its significance. He noted that the development of SAF could serve as a compelling factor in retaining existing airline customers and attracting new ones.

Thus, establishing SAF infrastructure becomes pivotal, and he emphasized the need for close collaboration with other stakeholders to boost the production and distribution of SAF throughout Africa.

This summit took place shortly after the aviation discussions initiated three weeks ago in Nairobi, Kenya, during the eighth meeting of the International Civil Aviation Organization (ICAO).

The meeting gathered over 300 delegates from international and African civil aviation agencies, focusing on addressing issues related to air transport security, facilitation, and sustainability in Africa.

ICAO President Salvatore Sciacchitano emphasized Africa’s imperative to prepare for an upsurge in air traffic in the coming months, necessitating improved airport safety and passenger experiences.

Also Read: Why it’s time for Africa to become global supply chain hub

Review of Africa’s aviation industry

AccBoeing’s latest report, “Commercial Market Outlook for 2023,” predicts significant growth in Africa’s aviation industry. Domestic passenger air traffic is expected to increase more than fourfold over the next 20 years. Boeing estimates that by 2042, about 1,025 new airplanes will be necessary to accommodate this growth and replace aging fleets.

Additionally, the report forecasts that Africa’s overall air traffic growth will surpass the global average, reaching 7.4 per cent, with flights already exceeding pre-pandemic levels. This growth will drive a substantial demand for aviation professionals, including 21,000 pilots, 22,000 technicians, and 26,000 cabin crew members.

Boeing’s Randy Heisey, the Managing Director of Commercial Marketing for the Middle East and Africa highlighted the potential for African carriers to expand intra-regional traffic and capture market share by efficiently connecting passengers and facilitating commerce within the continent.

He noted that the demand for single-aisle narrow-body jets, like the Boeing 737 MAX, is expected to significantly drive fleet growth, accounting for over 70 per cent of commercial deliveries.

Airbus, a gold summit sponsor, also foresees a substantial increase in demand for new aircraft in Africa by 2042. Airbus Marketing Director Joep Ellers explained that this growth in the aviation sector will drive an annual demand for services, increasing from $2 billion to $7 billion.

Furthermore, expanding Maintenance, Repair, & Overhaul (MRO) services at regional and local levels is crucial for the sector’s growth, safety, and long-term sustainability.

Next Read: Insulating African Economies from the Global Polycrisis

Aircraft demand projection

Airbus expects a demand for 1,180 aircraft with more than 100 seats for African airlines over the next 20 years. Of these, 880 will be single-aisle planes, and 300 will be wide-body aircraft.

Currently, Airbus holds a 37 per cent market share in Africa, operating 265 aircraft across 36 African airlines. The company also has 42 per cent of the order backlog in Africa, totaling 41 aircraft, and expects to secure at least 50 per cent of these orders when they materialize.

Data from AFRAA (African Airlines Association) suggests a promising financial outlook for African airlines in 2023 compared to the challenges faced in 2022. In 2022, African airlines collectively encountered a revenue gap of $3.5 billion compared to 2019.

However, there is notable progress towards a complete rebound to 2019 traffic levels. Domestic, intra-Africa, and intercontinental market shares are estimated at 34 per cent, 29 per cent, and 37 per cent, respectively.

This underscores the industry’s resilience and adaptability despite unprecedented challenges. While the full-year revenue gap for 2023 is yet clear, 2023 will be a markedly improved year compared to the turbulent conditions experienced in 2022.

 Recovery from Covid-19

Africa’s aviation sector is steadily recovering from the impact of the COVID-19 pandemic. Air cargo has rebounded by 31.4 per cent, and air travel is at 93 per cent of 2019 levels. According to expert projections pre-pandemic passenger traffic levels will come back achieved in 2024.

The pandemic severely affected Africa’s air transport, resulting in lockdowns and travel restrictions. Before COVID-19, aviation in Africa supported 7.7 million jobs and contributed $63 billion to the region’s economy.

Demand for aviation will possible triple over the next 20 years, but economic progress in Africa will remain limited until the continent addresses the internal market constraints.

Also Read: Harnessing wave energy to fix Africa’s electricity crisis

Focus on Africa initiative

In April 2023, the International Air Transport Association (IATA) launched “Focus Africa” to enhance the role of the aviation industry in Africa’s economic and social development, improving connectivity, safety, and reliability for passengers and shippers.

The initiative aims to bridge the gap and make Africa benefit from aviation’s connectivity, job creation, and economic growth. It seeks to align public and private stakeholders to achieve measurable progress in six key areas: Safety, Infrastructure, Connectivity, Finance and Distribution, Sustainability, and Future Skills.

“Africa stands out as the region with the greatest potential and opportunity for aviation. The Focus Africa initiative renews IATA’s commitment to supporting aviation on the continent,” noted Yvonne Makolo, CEO of RwandAir and first female Chair of the IATA Board of Governors (2023-2024).

Barriers in Africa’s aviation industry

The African aviation sector faces numerous challenges, including high fuel and energy costs. Currently, African airlines are grappling with surging Jet A1 fuel prices. The global weekly average jet fuel price reached $126.37 per barrel in late August, up from $103.64 in July.

This price increase poses a new challenge for airlines in maintaining profitability. IATA reports that African carriers incurred cumulative losses of $3.5 billion from 2020 to 2022, with additional losses of $213 million in 2023.

Inflationary input costs, limited connectivity, slow adoption of global standards, skill shortages, taxes, levies, regulatory barriers, and rising infrastructure charges have also impeded the sector’s full recovery and growth.

Another significant obstacle has been the growing levels of blocked funds, hindering the sector’s return to profitability. Much of these blocked funds are in Africa, with 14 countries accounting for approximately 70 per cent.

Repatriating earnings

Around $1.5 billion in airline funds remain inaccessible across the continent. Blocked funds typically refer to money held by governments, often due to regulatory requirements or economic policies, which prevent airlines from freely accessing or repatriating their earnings from certain countries. This has become a particular concern in Africa.

IATA’s Director General, Willie Walsh, emphasized the importance of resolving this situation. He noted that airlines can only continue to offer services in markets where they can access the revenues generated from their commercial activities.

Collaborative efforts between governments and the industry are crucial to ensure African airlines can provide vital connectivity that drives economic activity and job creation. Prolonged blocking of funds puts airlines at risk of a severe financial crisis and potential bankruptcy.