CEO, African Aviation, Nick Fadugba
In spite of the hiccups associated with aviation development in Africa, experts have designated the continent as the fastest growing air transport market in the world, as the region beckons with emerging economic growth.
Aviation experts who met at Addis Ababa, Ethiopia on Tuesday at the 22nd Annual African Aviation MRO Supplies and Stakeholders Conference organised by CEO of African Aviation and former Secretary General of Africa Airlines Association (AFRAA), Nick Fadugba, acknowledged that Africa held irresistible attraction in air transport but lamented that Africans were not benefitting from this bourgeoning market due to poorly established airlines.
Managing Partner of Ernst and Young, Dr. Zemedeneh Negatu, reeled out gory facts about airlines operation in the content, disclosing that about 95 per cent of airlines established some years ago in the region are either moribund or have become extinct.
He noted that the African airlines’ share of the global market was paltry four per cent.
Negatu therefore suggested that the only way out of the low performance and profitability of African airlines was for them to go into merger and have economy of scale, remain competitive and also deploy higher operational fund.
He noted that combined resources of Africa’s three leading airlines of Ethiopian Airlines, Kenya Airways and South African Airways was just a third of Emirates Airlines, urging African airlines to de-emphasise the ownership syndrome and all the ego associated with it and go into merger as quickly as possible, stressing that that is the only way they would survive and grow.
“Merger is the way to go in present day aviation development. Over 95 per cent of African airlines are distressed. It is impossible for any airline to go it alone. Look at the two major airlines in the US and the world, American Airlines and United Airlines merging for the purposes of survival.
“The combination of SAA, Ethiopian and Kenyan Airways is just one-third of Emirates and these are the biggest airlines in Africa. They’re small compared to competition. Ownership is irrelevant, what is important is partnership and collaboration,” Negatu said.
Also, Dr John Tambi of NEPAD said that since aviation remained a major contributor to Africa’s GDP, creating direct and indirect employment of over six million, governments should harness the sector’s potential effectively.
“Transport cost increases the price of African goods by 75 per cent and Africa still lacks the necessary infrastructure to ensure rapid and radical economic growth and development,” he said, blaming African governments for neglecting the sector over time.
Tambi remarked that issues of safety and security in African aviation sector could only be guaranteed through efforts by governments to encourage establishment of Maintenance, Repair and Overhaul (MRO), centres across the continent.
According to him, African airlines were spending a huge chunk of their revenue on aircraft maintenance overseas that increases their cost of operation and limits their capacity to compete with non-African airlines.
Fadugba in his opening speech at the conference said that African governments would assist the airlines in the continent if they invested in MRO facilities, lamenting the huge resources the airlines spend on overseas maintenance checks, which also takes time, thus making the airlines to lose huge revenue.
He particularly urged the Federal Government to ensure that MRO centres were set up in the country to reduce the burden of domestic airlines.
Ethiopia’s Minister of Transport, Ato Diriba Kuma, appealed to other governments in Africa to emulate his country’s example in having viable MRO centres and aviation training schools to assist their airlines and promote economic growth in the continent.