Overview

Africa currently accounts for only two per cent of world air traffic. A recent market forecast issued by Airbus, suggests that over the next 20 years, air traffic throughout Africa will grow at an average rate of 5.1 per cent per annum, equal to the expected growth in the rest of the world. Other forecasts predict 6% per annum growth. Over the 20-year period covered by the Airbus study, it is expected that there will be an almost 150 per cent increase in seat demand, requiring a 4.5 per cent increase in fleet capacity.

The major airline destination in Africa is South Africa. There has been a five-fold increase in the number of foreign carriers operating into South Africa over the past five years, in response to demand from businessmen and tourists. The same is happening elsewhere in Africa with the result that airlines are purchasing new aircraft, new carriers are being formed and airports are being upgraded. Another trend is the move towards privatisation of the state owned African airlines.

Airbus expects that no less than 96 per cent of the current African fleet will have been retired by the end of the forecast period. Among the turboprop aircraft which are certain to be included in this fleet renewal process are 50-seaters such as the Fokker F27 and Ayro 748. The combined total of these types in service with African carriers, exceed 50 in number. Sales of the ATR 42 and ATR 72 aircraft now account for a total of nearly 50 among nearly 20 airlines in the region. ATR is part of the Acro International group which has brought together ATR, Avro and Jetstream.

Airports

South Africa’s major airports are run by the government parastatal Airports Company. The company has moved aggressively toward commerciality in recent years and is expected to be one of the first South African parastatals to be privatised.

Kenya’s major airport, Kenyatta Airport at Nairobi, has undergone major upgrades to the runways.

Airlines

The South African air transport industry is dominated by South African Airways (SAA) which has been in existence since 1934. The airline employs more than 10000 people and has turnover in excess of one billion dollars per annum. The company operates a fleet of 60 aircraft making over 650 flights a week to seven South African destinations as well as flights to 20 international destinations.

SAA, Air Tanzania and Uganda Airlines formed Alliance Airways. Alliance Airlines is making losses because of lack of co-operation from Uganda Airlines and Tanzanain Airlines which are competing on the same routes despite the ministerial agreement.

Air Afrique, headquartered in Abidjan, Cote d’Ivoire, was created by French interests in 1961 and operates flights between the nations of West and Central Africa and Europe, the USA and South Africa. The shareholders in the company are the governments of Benin, Burkino Faso, Central African Republic, Chad, Congo, Cote d’Ivoire, Mali, Mauritania, Niger, Senegal and Togo. The airline has a fleet of twelve aircraft and a staff of 5000. The company has serious problems servicing debt incurred in purchasing five Airbus 310s in the early 1990s which was exacerbated by the massive devaluation of the CFA Franc in 1994. There are also serious tensions between staf and the managing director Mr Yves Roland-Billecart. A partial privatisation has led to more than 30% of the shareholding being sold to Air France, Caisse Francaise de Developement, the West African Development Bank and DHL. 1995 losses for the company were estimated to be $US 19 million. The company has a porr reputation for meeting timetables and providing customer service. Ticket prices are seen to be too high with the result that, on average, only 60% of seats were filled.

TZI has taken a share in Zimbabwe Express Airlines which transports passengers between South Africa and Zimbabwe as well as between airports in Zimbabwe.

Cash-strapped Nigerian Airways is unable to account for $ 100 million allocated to the previous management of the company in order to split the airline into two parts, one serving the internationa market, the other the local market. The airline has been unable to pay international debts leading to seizure of planes. Nigerian Airways currently only has 4 aircraft in operation.

In Zaire, two private airlines, Zaire Express and Shabair, have taken over from the collapsed Air Zaire and run a reasonably efficient service.

Nigeria Airways has signed an agreement with private carrier Bellview Airlines to operate some of its unutilised routes. Bellview will operate flights from Lagos to Bombay via Nairobi as well as the route to Brazil from November. The privately-owned Bellview is based in Lagos and started business as a domestic operator but now also flies to Abidjan and Freetown along the west coast of Africa. The aim is to reopen unused routes belonging to Nigeria Airways under a series of bilateral agreements signed in the 1970s.

Benin Air Express, Air Niger and Peace Air Togo have formed Air Inter Afrique: a regional air transport consortium. The new group is expected to operate ATR42s from Lomu, Contonou and Niamey in a feeder to trunk services.

Ethiopian airlines is another African airline which enjoys a high reputation.

Privatisations and Parastatals
Recently privatised Kenya Airways was listed on the Nairobi Stock Exchange which valued it at around US$100 million. The current shareholders are KLM (25%), the Kenyan government (23%) and overseas (14%) and local (37%) private investors. This is the largest flotation on the NSE by a factor of three. Both Tanzania and Uganda have talked of privatising their airlines but, with improved profitability, this view might change. Kenyan Airways returned a profit of $US 17 million in 1994 /95.

In South Africa, the Airports Company, Sun Air and South African Airlines have all been identified as potential privatisation candidates.

The Malawi government plans to privatise the main hotel group, Tourism Development and Investment Company Limited (TDICM), and Air Malawi, the national carrier, and 80 other companies by 1998.

The Lesotho government plans to privatise a number of public corporations including Lesotho Airways – which owns three aircraft and has regional routes to Johannesburg, Swaziland, Maputo, Zimbabwe and Durban – and the Marakabei and Quthing Lodges.

Zambia Airways and Air Zaire have been allowed to go into liquidation by their government shareholders.

The Mozambique government is selling TTA, the national light aircraft company.

Shaun Bakamoso

Greetings. I'm Shaun Bakamoso, and I'm thrilled to be your guide through the dynamic world of business news in South Africa here at mbendi.co.za. With a passion for staying informed and a keen interest in the ever-evolving landscape of business, I've dedicated myself to providing you with timely, insightful, and comprehensive coverage of the latest developments impacting the South African economy. bakamoso@gmail.com / Instagram