Is African Aviation Finally Set To Take Off ?

Low cost African aviation finally appears to be taking off, the sector is one of the keys in the quest to improve intra-African trade (which is poor compared to other regions). This change is thanks to the emergence of a new airline FastJet backed by the EasyJet founder Stelios Haji-Ioannou, the company is starting a low cost service in Uganda, Tanzania and Kenya, while another Tunisian airline Syphax has started in the teeth of opposition from Tunisian Air, which has upped its game in the face of this new competition.

Aviation in the region is crying out for new competitors, for too long the industry has been dominated by state owned or partly state owned monopolies, offering terrible service and poor safety records. State owned airlines (not just African carriers) perform badly, often because of their elevated status as national flag carriers, so no matter how badly they perform, the government will bail them out. Having a national carrier is a big status symbol for countries and politicians who like to travel in style, and arrive at international conferences with their country’s flag on the plane. The other major problem has been the failure to properly implement the Yamoussoukro Declaration, which was supposed to liberalise air space between African countries, however it was largely ignored or circumnavigated by governments, eager to protect their national carriers. One success story has been Ethiopian Airlines, who have been winning awards, as well as opening new routes, putting on good service and making a modest profit, despite being state owned.

A couple of years ago I had a number of conversations about the potential for a new African airline with various businessmen, my feeling then and now is that the idea has massive potential, given the growing business confidence across the continent, the poor service currently offered and a great deal of pent up demand. The main hurdles to my mind are the high and fluctuating cost of fuel which represents the primary cost of running an airline, along with the competitive, regulatory and political obstacles that new entrants will face, such as the wrath of established carriers. Other big players have failed before, Virgin Blue were forced out of Nigeria a few years ago, but if FastJet’s low cost model works in East Africa, it should be able to replicate its success across the continent.



Categories: Company Case Studies, Frontier Markets, Kula Ring Trade Blog

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  1. Aviation’s final frontier: Air travel in Africa | Frontier Market Strategy

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