African airlines must focus on safety, costs and more - industry leader | Fin24
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African airlines must focus on safety, costs and more - industry leader

Nov 16 2019 13:29
Carin Smith

The African aviation industry needs to focus on safety, cost-competitiveness, gender diversity and opening up travel and trade on the continent.

According to the International Air Transport Association (IATA), addressing these four issues would allow African aviation to drive economic and social development on the continent.

African aviation has a huge potential, IATA CEO Alexandre de Juniac said at the opening of the 51st annual general assembly of the African Airline Association (AFRAA), which is took place in Mauritius this week. IATA estimates that aviation in Africa currently supports $55.8bn in economic activity and 6.2 million jobs.

Regarding the safety issue, De Juniac said currently only 26 African states meet or exceed the threshold of 60% implementation of the International Civil Aviation Organisation (ICAO) standards and recommended practices for aviation regulations.

Furthermore, only Mozambique, Rwanda, Togo and Zimbabwe have so far incorporated IATA's Operational Safety Audit (IOSA) into their safety oversight systems.

IATA hopes the African Continental Free Trade Area (AfCFTA) will boost intra-Africa trade through the elimination of import duties and non-tariff barriers.

Elijah Chingosho. Berthé, secretary general of AFRAA, also emphasised in his welcome address at the AGM that the African aviation industry must contribute to the economic integration on the continent through a sustainable air transport system.

"Momentum is needed to shift the tides of African aviation. It is for this reason that this year's gathering focuses on the sustainability and profitability of African airlines in an increasingly interconnected continent," said Berthé.

"We must explore challenges and lessons and the next steps geared towards enhancing global competitiveness and, in so doing, boost employment creation, revenue generation and continued economic transformation."

African airlines saw a steep decline in international traffic in September, according to the latest report by IATA, released last week.

In September African airlines' international traffic growth slowed down to 0.9% in September compared to 4.1% growth recorded in August.

IATA estimates that African carriers lose $1.54 (about R23) for every passenger they carry. High costs contribute to these losses.

However, international traffic growth for the third quarter of 2019 remains at around 3% year-over-year, according to the report. While capacity rose 2.5% in September, the load factor dipped 1.1 percentage points to 71.7%.

The load factor is the portion of revenue-generating available seats that were sold to fare-paying passengers.

At the same time, African carriers posted the fastest cargo growth of any region in the world in September, with an increase in demand of 2.2% compared to the same period a year earlier.
Nevertheless, this was a significant slowdown in growth from the 8% recorded in August, according to another recently released IATA update.

"Strong trade and investment linkages with Asia and robust economic performance in some key regional economies contributed to the positive performance. Capacity grew 9.4% year-on-year," according to the IATA cargo report.

It has been a tough period for airlines in southern Africa and the rest of the continent, acting SAA CEO Zuks Ramasia said at the recent AGM of the Airline AssociationSouthern Africa (AASA).

African airlines are collectively expected to lose $300m (about R4.4bn) in 2019 – the 9th straight year of losses for the continent, according to IATA.

In the view of Ramazia, African airlines allowed foreign airlines to "eat their lunch" by allowing them to come in and be more active on the continent.

aasa  |  iata  |  africa  |  airlines  |  aviation


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