COVID-19: How well have African Airlines recovered?
The big question as to whether Africa could produce its own mega-carrier or an ‘African Airlines Alliance’, like the global alliances of SkyTeam, Oneworld and Star Alliance, appears to be getting a definite response as Kenya Airways signed a Strategic Partnership Framework with South African Airways late November 2021. The airlines describe this step as “a key milestone towards co-starting a Pan African Airline Group by 2023.”
This raises a new question mark as to whether this ‘airline group’ will join forces with the Ethiopian Airlines Group for the foundation of the African Airlines Alliance, which will involve airlines from East, West and Southern Africa. It also raises a poser as to the likelihood of North African airlines to join consolidation within Africa given given their propinquity to Europe.
While the advocacy for consolidation among African airlines has grown louder above the chaos of pandemic, it appears African airlines need an example of big in-continent partnership to emulate or join, and, which has just been provided by this ambitious partnership between two of Africa’s big five airlines. Africa’s aviation development is still at its nadir, holding onto a dismal 2% of global passenger and cargo traffic. Ubiquitous airline partnerships Africa-wide could result in a tremendous transformation period in Africa by 2025. For most Africans, “this is the Africa we want.”
The KQ/SAA ‘consolidation’ effectively complements the strategy by the African Airlines Association (AFRAA) to engender cohesion among African airlines under AFRAA’s Route Network Coordination Scheme and related joint schemes, which enable African airlines to interact more closely, thus creating the foreground for the formation of more elaborate partnerships including the ‘African Airlines Alliance’. AFRAA Secretary General, Mr. Abdelrahmane, believes stronger partnerships is the way to go for African airlines emerging from the asphyxiating COVID-19 pandemic.
Matthias Kern and Arvind Chandrasekhar of Lufthansa Consulting believe “COVID-19 has spurred consolidation,” and “the future will see more consolidation,” revealing also that partnerships struck in the last 18 months in Africa include but are not limited to codeshare agreements between Kenya Airways and Congo Airways, Dana Air and Ibom Air in Nigeria, Gol and Ethiopian Airlines and a series of new agreements signed by Airlink.”
In truth, African airlines are beginning to reposition themselves for eventual intra-Africa collaborations compelled not just by the pandemic but the need to exploit the expansive market in Africa made up of 1.3billion population and $3.4trillion economy. Currently, less that 200million passengers recorded in Africa in 2019 and much less in 2020, less than 10% of Africa’s 1.3 billion population uses air transport for movement for business, leisure, health or education.
Vehicle For Integration
At the policy and regulatory levels, the continent’s unprecedented pillars of integration – which mainly include the mutually dependent and complementary Single African Air Transport Market (SAATM) and the African Continental Free Trade Area (AfCFTA) – designed by the African Union Commission (AUC) to liberally interconnect by air the continent’s economies are vital to deliver the long-awaited next-phase of Africa’s aviation and economic evolution. Ipso facto, the continent has become an important focal point of aviation players within and outside Africa.
According to Mr. Tefera Mekonen, Secretary General of the African Civil Aviation Commission (AFCAC), 35 States have signed the SAATM, while 18 States have signed the Memorandum of Implementation to align their Bilateral Air Services Agreements (BASAs) with the Yamoussoukro Decision (YD), which in effect brings the 5th Freedom Right and more to bear on Africa’s aviation and economic transformation.
In this connection also, the study commissioned by the African Union (AU) to uncover the benefits of full liberalization on each of Africa’s 55 States, conducted by the International Air Transport Association (IATA) and InterVISTAS and released mid-November 2021, makes heartwarming revelations on these benefits.
Ian Kincaid, Senior Vice President of InterVISTAS, says “The gains to member state economies and societies are evident and substantial and will contribute to the long-term development goals for the continent.”
Thus, while SAATM and the AfCFTA could lift over 30million Africans out of abject poverty, as projected by the World Bank, perhaps the thought of being able to fly to an African destination just 3 hours away without first flying 6 hours to Europe or Middle East or spending many hours or days makes SAATM the epoch-maker for Africa and its airlines.
Recovery From Pandemic
The temporary derailment of Africa’s growth by the COVID-19 pandemic raises much anxiety among players and observers keen on witnessing Africa’s airlines’ transition to the much-awaited next-phase of development, riding on the back of the SAATM and AfCFTA.
Despite pre-pandemic and COVID-19-induced challenges facing African airlines, the strong advocacy for flexibility as well as prioritization of cooperation, collaboration and coordination among African airlines – already being observed by several of these airlines – suggests the airline industry in Africa could record more sustainable recovery and growth over the next 3-5 years.
Furthermore, heart-warming aircraft acquisitions announced at the Dubai Airshow for several African airlines also point to commitment of African carriers to excel. Overland Airways, Bestfly, Air Tanzania, Afrijet, Congo Airways, Air Peace and Uganda Airlines are among many African passenger airlines that have ordered or received new airplanes this year. On the cargo-only front, Allied Air, EthiopianCargo and Astral Aviation equally received or ordered newer aircraft this year.
In spite of these spirited investments, there is still a huge question mark over the state of convalescence of African airlines lacerated by the sudden pandemic, given the reluctance of governments to tear down obnoxious excessive taxes on aviation and African airlines, as well as the tardy implementation of SAATM/AfCFTA among many States. A careful look at intra-Africa airline tickets, for instance, shows huge proportion of the fares going to taxes.
However, it is notable that African airline industry was able to restart safe operations towards the end of 2020 after nearly one year of shutdown of operation due to the COVID-19 pandemic, rising above the associated risks of major incidents and accidents that could result from inappropriate return of aircraft to service after such a long period. Several African airlines are also engaged in renewing their safety audits, which is the foundation for improved operational safety performance.
Also, in some remote markets in West, North and East Africa various forms of civil unrest poses security challenges that discourage air traffic, tourism movement and associated investments. The global aviation industry has renewed emphasis on strengthening security, re-emphasised among African Civil Aviation Authorities and airlines. The Federal Airports Authority of Nigeria (FAAN) recently announced the training of aviation security personnel and there are arguments over letting them carry firearms.
Concerning the environment, as newer aircraft technologies are expected to cut emissions by 15-20%, the trend of new aircraft orders among African airlines would check emissions, though Africa’s air traffic remains very low, while the global industry strives towards Sustainable Aviation Fuels (SAFs).
Further, the airports are enhancing improved environmental performance benchmarks especially through infrastructure that facilitates airlines’ environmental performance. For the Air Traffic Management (ATM), new-technology-backed ATM facilities such as the Automatic Dependent Surveillance Broadcast (ADS-B) are being established in parts of West, East, Central and Southern Africa to reduce flight time and related emissions, etc., which African airlines would benefit from using compatible aircraft.
Repairing Disconnect With Economic Sectors
Of tremendous importance is the availability of traffic to feed African airlines. The perceived disconnect between aviation and sectors of the economy that must provide financing, cargo and passenger traffic to feed African airlines remains worrisome. Aviation and air transport are still largely seen as esoteric if not mystifying. Therefore, governments and individuals in many cases fail to partner with the industry, while governments tax airlines and aviation heavily without necessarily ploughing back the revenue for aviation development in Africa. The obvious lack of coordination between air transport and the produce and product sectors leads to poor packaging for air transport as well as gross wastages of goods transported by land. This divide must be closed for sustainable recovery of African airlines.
Beholding Africa’s Great Future
2021 is a year of early recovery for Africa, as well as the initiation of flexible innovative strategies to transition into Africa’s next-phase of development. Perhaps, one key driver and measurement of progress would be the African Airlines must set targets on the share of global passenger and cargo traffic to be controlled by African airlines, which currently stand at a dismal 2%. With a 5-10-year common target also shared by African governments, all would work cooperatively realizing, for instance, that practices such as excessive taxes, non-liberalization, inimical airline business models, among others continue to dwarf African airlines’ global performance. Where there is a will, there’s always a way. And for African airlines, time will tell.
