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Africa’s aviation market set to soar to new heights

Africa’s aviation market set to soar to new heights

Airlines inside and outside Africa are upbeat about the growing opportunities and huge potential in the continent’s aviation industry, writes NJ Ayuk.

Africa is set to become one of the fastest growing regions for aviation in the next 20 years with an annual expansion of nearly 5%, according to the International Air Transport Association (IATA).

Driving this growth is international and African carriers adding more routes on the continent and scaling up their operations by acquiring or forging partnerships with other airlines operating there.

In the past decade, Turkish Airlines has tripled the number of African cities it serves — from 18 to 56, while other Middle Eastern, European and Asian airlines, are adding routes as well.

Meanwhile, other African carriers are rushing to raise capital to fund their expansion, by offering to sell stakes in their companies to other airlines on the continent.

For example, in 2018 the continent’s largest airline by revenue and profit, Ethiopian Airlines, signed a deal to acquire a 45% stake in Zambia Air, resurrecting the Zambian flag-carrier more than two decades after its shut-down. 

Vanity airlines are also becoming a thing of the past on the continent, as African governments take steps to turn debt-laden, loss-making state airlines into self-sufficient operations, usually through restructuring plans or by selling them off.  

Moreover, another sign that Africa’s aviation industry is witnessing an upturn is that low-cost carriers have begun serving second-tier cities on the continent, a trend that industry experts expect to continue.

South Africa’s Kulula,com became the continent’s first budget airline in 2001. Since then, others have jumped in, connecting cities that bigger carriers deem unprofitable to serve at prices the growing middle-class can afford.

Hundreds of thousands of Zimbabweans living in South Africa breathed a sigh of relief  in 2015,  as low-cost carrier flyafrica.com stepped in to serve destinations that debt-strapped Air Zimbabwe was no longer able to cater for.

Kenya’s low-cost airline Fly 540 has also applied for an licence from aviation regulators to extend its domestic flight offering to tourist and business destinations such as Nanyuki, Meru, Amboseli, Lewa, Isiolo, Samburu and Moyale.

The sky’s the limit 

Modernising outdated airport infrastructure also requires major investment to meet growing passenger volumes. As a result cities are opening their doors to private and foreign capital investment to fill the infrastructure gap.

Gulf-owned Qatar Airways is betting big on African aviation, swooping in to buy a 49% stake in RwandAir, as well as a 60% stake in a new $1.3 billion international airport planned on the outskirts of Rwanda’s capital, Kigali. 

As global competitors race to capitalise on Africa’s burgeoning commercial aviation sector, Ethiopian Airlines has created a blueprint called Vision 2025 to expand its reach even further. Key to the plan is building Africa’s largest airport in a bid to make Ethiopia the region’s leading aviation hub. 

The brand new $5bn airport outside the capital Addis Ababa can handle 22 million passengers a year, as the rapidly-expanding carrier outgrows capacity at its current base in the capital’s Bole International Airport.

The industry’s expansion will create millions of jobs in construction, airport technical support, maintenance, customer service, and other fields. Once aviation development hits a critical mass, it will become a major driver of Africa’s economy, including taking the continent’s hospitality and tourism industries to new heights.

NJ Ayuk is the CEO of Centurion Law Group and the Executive Chairman of the African Energy Chamber. He is the author of  “Billions at Play: The Future of African Energy,” discussing the global stampede into LNG what it means for Africa.

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