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Travel industry news

18 Jul 2018

BY Edward Robertson


Rationalisation will see up to five key African airlines emerge

African airlines are facing a potential period of rationalisation which would see up to five major ones emerge.

Aircraft, aeroplanes, in a queue

The continent currently has as many as 100 aircraft operating in it

Speaking at Routes Africa in Accra, Ghana, on a session on African Single Skies, OAG international business development manager Mory Camara said there are currently about 100 airlines operating on the African continent.


He believes that natural market forces will see the numbers whittled down, with a few dominant airlines operating across the continent.


Camara said: "We’ve got too many airlines, about 100 are registered in Africa. In the next few years we’ll probably see about four or five big airlines emerge.


"It could be like in America where four airlines have 80% of the capacity and shared 50% of the profits."


In the meantime, IATA vice president, Africa, Raphael Kuuchi said African airlines should consider working together in order to better compete with airlines from outside the continent.


He added: "If we organise ourselves as African and our carriers are allowed to work together... we can then compete with airlines coming into Africa.


"Let us focus on doing the interior of Africa and doing it well and that will give us the basis to be able to compete."


Perhaps one of the best places airlines could combine forces is on trying to get aviation taxes lowered which all the panel agreed were currently too high.


However, Ghana Airport Company managing director John Attafuah said it is not the airlines that suffer the brunt of the taxes.


He added: "We charge one of the highest (tax rates) but that is not paid by the airlines, it is paid by the passengers."


Camara agreed, adding: "Aviation is an economic driver, they need to look at taxes and pricing as it costs $400 to fly for an hour from Accra to Lagos. Flying is still expensive so we need to look at all the charges."


While the panel also welcomed the idea of some African hubs emerging, none thought it would happen any time soon.


Kuuchi said: "Creating hubs cannot be done by an individual state, it has to be done by a network carrier. Unfortunately many African carriers are so small that they operate a very small network; therefore it makes it very difficult to make their business a hub."

ACI Africa secretary general Ali Tounsi added: "It is a good idea but in the end it is unlikely. You can dream but the reality is different when everyone is thinking of themselves."

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