AviaDev – Africa – Cape Town 24-26 April 2019

Unpacking the complexities of African aviation connectivity and infrastructure

development challenges

The African region makes up at least 12% of the world´s total population and yet only
constitutes 2.5 % of the global passenger air traffic [OECD, 2018]. The African region is
supported by 731 airports and only 430 operating airlines catering for so such a large
population. However, taking into account that air travel in Africa is still characterised by high
fares, lack lustre service performance and poor connectivity within intra-route networks and
further exacerbated by weak airport infrastructure. This however, will soon become historical
evidence as the equation of economic progress starts to tilt signaling positive compounded
annual growth rate of at least 5%. According to the International Air Transport Association
IATA [2017], Africa is set to become the world´s fastest aviation growing market in the next 20
years. But, what lies underneath this growth trajectory are some complexities that may impede
even faster growth. Although these growth projections are optimistic, challenges and
complexities may impede faster progress. Let us examine these impediments:

• Airport infrastructure is significantly under developed and not prepared to absorb the
growing volume of passengers and cargo within the continent. This means that
necessary facilities and infrastructure need to be in place to match the potential growth
in air traffic.
• The pressing issue has been associated with securing the much needed capital to
finance airport infrastructure development. This is a coherent joint effort that requires a
high degree of expertise and collaboration of public-private equity investments.
• The majority of airlines and airports are run as state entities and operational efficiency
is relatively poor with only a few carriers like Ethiopian Airlines, Kenya Airways and
South African Airways have made somehow headway progress. The struggling
national carriers are characterized by a lack of efficient operations and a rather
unreliable erratic and infrequent service. According to IATA [2018] African carriers have
been haemorrhaging cash and continue to operate as loss making entities after a
collective net loss of $100 million in 2017 with a $1 loss to each passenger flown. Also,
ineffective competition in service and quality also is an issue.
• Ownership and control is still a major hurdle for most investors. Airlines like Air Malawi
has restrictions on more that 49% on ownership structure. With so many carriers
bleeding cash, reconfiguring the ownership structure will pave way for access private
capital that could enhance the airline´s performance effort.
• Lack of market access has also been problematic and continues to put a challenge on
African carriers. However liberalisation of air transport in Africa could open a myriad of
opportunities for airline carriers, allowing them to increase their network reach with no
restrictions. Of course the Single African Air Transport Market [SAATM] which has been
dubbed a seismic event in terms of opening up Africa´s air transport market will have
fundamental impact on the continent.
- Stimulation of economic growth
- Boost air transport connectivity
Etc.

©Prepared by Prof. Dr. Eyden Samunderu for AviaDev Conference – 24-26 April 2019 – Cape Town Page 1
 AviaDev – Africa – Cape Town 24-26 April 2019

However, groundwork is required for effective policy integration and creation of an open wide
air transport market. This calls for harmonizing civil aviation regulations. But obstacles are still
visible:

Obstacles and dilemmas

• Some African governments are reluctant to cede control to truly autonomous National
Civil Aviation Authorities
• Who will benefit from a liberalized air transport market? African airlines or foreign
carriers?
• Can a developing country promotes an “Open Skies” policy and still protects its own
airline industry?

Intra-connectivity
Africa’s failure to integrate and liberalize its intra-regional air transport market has been cited
as a significant reason why growth in the air transport market has not reached its huge
potential. Most countries rely on restrictive bilateral service agreements. This is a paramount
reason why insufficient integration and lack of non-restrictive open skies policy present a major
barrier to air transport growth in Africa. Open skies agreements not only enable better
competition, it allows carriers of 2 or more countries to operate any route between the countries
without interference in decisions about routes, capacity and pricing. The result is better service
provision, affordable airfares an efficient service for the consumers.

Since the air transport markets in Africa are small and dispersed, airfares are exorbitantly high.
As result, landing fees, fuel costs and airport taxes are also very high. The significance of
correlating airport development and improving air connectivity is paramount to the prosperity
of the region and the welfare gains to the African passenger. Let us look at the fundamental
benefits intra connectivity will bring to the continent and the following gains in facilitating
economic activity:
- New routes and increased frequency
- Shorter travel times for passengers
- A significant drop in airfares
- Inward investment flows
- Foster an increase in intra-regional trade

Concluding remarks

Finally, strategic collaboration through code sharing agreements within Africa´s continental
carriers could also provide a vehicle for better intra-connectivity. This means African policy
makers have to foster a more liberalized and integrated intra-African air transport sector. As
already mentioned in early parts of this paper, the drivers for growth are visible and a coherent
action plan is now required to facilitate intra-connectivity within the region through airline
network cooperation.

©Prepared by Prof. Dr. Eyden Samunderu for AviaDev Conference – 24-26 April 2019 – Cape Town Page 2
 AviaDev – Africa – Cape Town 24-26 April 2019

Dr Eyden Samunderu is a leading expert in the area of air transport with extensive consulting
experience. He currently holds a PhD in Strategic Management and is a Program Director for a
Master´s program at the International School of Management in Dortmund Germany. He is also
sitting as an Advisory Board Member for the Hamburg Aviation Conference. His research interests
include: aviation, multimarket contact, strategic groups and competition dynamics, container
logistics and maritime economics.

©Prepared by Prof. Dr. Eyden Samunderu for AviaDev Conference – 24-26 April 2019 – Cape Town Page 3