How to break the impasse that stops African airlines soaring

The onerous taxes and fees in the aviation sector stem from charges set unilaterally by governments

December 26, 2024, 4:37 PM

OR Tambo Airport in Johannesburg. Emirates is increasing its flights to the city and other destinations in Africa but the continent needs better internal connectivity

To reach the Africa Transport Forum held in Cote d’Ivoire in October, Zimbabwe’s deputy minister for transport and infrastructure development flew from Harare to Dubai. He then transferred to a flight that touched down in Accra, Ghana, on the way to Abidjan – Cote d’Ivoire’s largest city.

This convoluted journey, which took him miles out of his way and would have produced a fair few tonnes of carbon emissions, highlights the problems in the African aviation industry – and the vital connectivity that the Emirates airline is providing for the continent.

The Dubai-based carrier has been flying to Africa since 1986, with Cairo its first destination. Today it serves 20 passenger and cargo gateways on the continent.

At the end of October Emirates announced it was increasing the frequency of its flights to Uganda, Ethiopia and Johannesburg in South Africa, to reach 161 weekly flights from Dubai to 17 African nations.

The airline also has an extensive partnership network in Africa, with five codeshare and 18 interline partners providing access to 210 regional points.

The lack of intra-Africa aviation connectivity was a key talking point at the Africa Transport Forum, which was organised by the African Development Bank. The main challenges holding back expansion were cited as high operational costs and low consumer purchasing power.

According to figures shared by the International Air Transport Association, the African aviation sector has the highest operating costs globally. Aviation fuel is 17 percent more expensive than the world average, and taxes, fees and charges are 12 percent higher. The cost of finance, maintenance, insurance, air navigation, catering and ground-handling are also higher in Africa, Iata says.

Ethiopian Airlines is the largest African carrier, serving 61 cities across 40 countries in Africa and 140 international destinations from Addis Ababa. It says fuel accounts for 45 percent of its total operating costs. The global average is about 25 percent.

Market size is a broader challenge for Africa despite its clear potential

The onerous taxes and fees in the aviation sector stem from charges set unilaterally by governments, with airlines sometimes obliged to pay additional profit tax outside their home market.

This has forced some carriers to stop serving certain African nations. According to the African Airlines Association, the airport at Libreville in Gabon has some of the highest charges on the continent.

Connectivity in West Africa is particularly poor. Following the collapse of the postcolonial multi-flag airline Air Afrique in 2002, about 40 companies have been launched in the region, but the young carriers lack economies of scale and passenger traffic is not strong enough to sustain a growth in frequencies.

Connectivity with Southern and Eastern Africa is limited, and half the point-to-point routes in West Africa average fewer than 70 passengers a day.

Market size is a broader challenge for Africa despite its clear potential: the continent has 17 percent of the world’s population but only contributes about 2 percent of global travel.

African airlines are in a Catch-22 situation: to expand their routes and frequencies there needs to be more passenger traffic, but to stimulate growth in passenger traffic there need to be more routes and frequencies, not to mention more affordable fares.

The solution to the aviation impasse is liberalisation. Governments must end the monopolies on ground services and open their skies to competition.

The African Union’s plan for a Single African Air Transport Market for continental operators was adopted in 2018, but implementation has been slow.

To date, 37 of the union’s 55 member states have signed the commitment, representing 89 percent of the aviation market. However, there is still a lot of work to do in harmonising regulations.

Governments are proving reluctant to remove restrictions on traffic rights, capacity, frequency and pricing for African airlines, even while granting “fifth freedom” rights to non-African operators.

These rights allow carriers to take on passengers in a country other than their home state or final destination – a case in point being Emirates’ stopover in Accra on its Dubai-Abidjan service.

While African governments continue to hamstring each other, Emirates is making the right moves to stimulate traffic demand.

It is working with tourism boards in Africa to promote destinations and signing agreements with local carriers to become last-mile partners for its international travellers. This is what continental operators should also be doing.

African governments need to start looking at airlines as enablers of economic development rather than just transporters of people.

According to Iata, GDP growth has a 1:2 multiplier effect on air travel, with Africa’s passenger traffic already forecast to double by 2044. Better intra-Africa connectivity would drive even stronger aviation growth.

Liz Bains is a projects-focused business journalist covering Africa and the Middle East