A single Pan-African air transport alliance is essential

A single Pan-African air transport alliance is essential

The creation of a single Pan-African air transport alliance by 2017 is essential to safeguard the future of homegrown airlines

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During the recent African Airlines Association (AFRAA) annual general meeting held in November 2016 at Victoria Falls, a number of key top executives from a number of different African airlines expressed their concerns that the success of many, if not all of the continents current homegrown airlines was being threatened by the continued dominance and expansion of both Gulf and European carriers over the skies of Africa.

African airlines now only have 20% of the market share for intra-African air traffic, 20% less than in the 1990’s. This decline has resulted in a combined loss to all African Airlines of approximately $2 billion in recent years.

Emirates and Turkish airways continue to be the biggest competition

Whilst a number of the airlines represented at the meeting have different opinions on how best to resolve the current issues, one thing they do all agree on is the need to work together and create a Pan-African alliance in order to be able to fight off the serious competition from the airlines with the largest number of seats available in Africa, namely Emirates and Turkish Airways.

Aron Mutensi the chief commercial officer (CCO) for South African Airways and Busera Awol the CCO for Ethiopian Airlines stated that although they are currently financially benefitting from the success of airlines such as Emirates due to existing code-share agreements, more needed to be done, including the creation of an African alliance in order to safeguard the profitability and future of the continents homegrown airlines.

Aron Mutensi went on to stress that he was in no way encouraging the creating of any type of market protection, explaining “We are not talking about protectionism at all,”, “We want to be robust in our discussion to have code-share arrangements out of Durban, out of Cape Town…Instead of sitting rolling my arms I am actually working with Ethiopian Airlines to [fight] the dangerous guys coming from the Middle East.”

Some airlines believe success requires expansion outside of the continent

John Mirenge the Chief Executive Officer (CEO) of RwandAir is adamant that in order to be able to ensure his company’s future, he cannot simply focus on his home continent and ignore the rest of the world. “Should we only look at our home base and forget about the rest of the world? No! We still have our people trading with the rest of the world, especially Asia, the Gulf and so on. But also, we have historical colonial relations with our previous masters. There is a need to fly beyond, to Europe and the U.S.”, “We need to recapture our market share of intercontinental traffic and this can be done if we all rise and do the right things towards attacking the enemy at their bases rather than waiting for them to come and finish us before even we fly,” he said.

 

Others believe it is more important to focus on being successful within Africa before expanding beyond its borders

The smaller African airlines disagree with Mirenge’s opinion, stressing that they must first ensure they can both be successful and generate profits inside Africa before expanding into what is a fiercely competitive market elsewhere. Busera Awol, the CCO of Ethiopian Airlines who also founded ASKY airlines said, “It all starts there,”, “If you are not profitable in Africa do not go long haul because you will die. When we started ASKY in 2010 everybody was pushing me to start flying to Europe to Paris. I said I will not fly to Paris before we become strong and profitable in Africa. If we do the right thing in Africa we can be profitable. ASKY is living proof.”

The creation of a single Pan-African air transport alliance is essential

The African Union Commission has proposed that a single Pan-African air transport alliance needs to be created before the end of 2017, a proposal supported by Ministers of transport from across the continent.

Pictures : adac-tchad.org and Afrikanspot

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