Africa is the future was the message that the AFRAA Secretary General,Dr. Elijah Chingosho,put to the continents aviation industry stakeholders at the 2011 Africa Airlines Associations (AFRAA) annual general assembly (AGA) held in Marrakesh,Morocco,recently.

In his opening addressed Chingosho emphasized that what the industry needed was government support, not aid. He stresses the importance of air transport as a means of mass movement of people and freight, not as a luxury purely for the affluent.

What was needed, he added, was action to ensure there was an even playing field, internal liberalization, reduction of excessive taxes, breaking the monopoly of airport service providers, improved safety image, retaining skilled human resources and commitment to environmentally sustainable growth.

Dr. Changsha deplored excessive airport taxes and fees levied on airlines and passengers saying: “It is stifling the development of air transport and compounding the many difficulties that African airlines have to surmount to be competitive and profitable.”

He also urged airlines to take the responsibility of safety seriously and stated that the EU list of banned airlines was viewed by African stakeholders as a ploy to switch traffic from African operators to European competitors. He asked that if the claim the African skies were unsafe then why the EU operators would continue to fly into these markets.

The secretary general also called on the EU to stop what he termed as “competition-induced blacklisting”. He added that what was needed was for governments to support the full liberalization of markets in accordance to the Yamoussoukro Declaration.

Officially opening the assembly on behalf to the Minister for Transport, The director-general of the Moroccan Civil Aviation Authority, Adnennebi Manar, challenged African airlines to open up their markets and brace themselves for competition. He urged airlines to seek partnerships to broaden their network and “mop up their traffic” so as to compete with operators from other regions.

The president of AFRAA, Royal Air Maroc, Driss Benhima, noted that the continent was ill-prepared to compete in a liberalized market. He added that Morocco had achieved its target of 10-million tourist arrivals largely due to the open skies agreement with the EU, even though it was at the expense of Royal Air Maroc as the carrier had to compete with mega scheduled and low cost European carriers.

Benhima urged African airlines to form commercial cooperation and joint initiatives so as to derive economies of scale in order to be competitive and profitable.

African Airline Growth

In his report to the assembly, Dr. Chingosho outlined the performance of the African airline industry as a whole noting that there had been an overall growth of 12, 9% in passenger traffic to reach 56-million, which was higher than the global increase of 7,9%.

Africa to Asia traffic, the forecast, was projected to have the highest growth at 8,1% .However, he said that the continents load factor was at 69,1% which was lower than the global rate of 76%. He attributed this to the failure to open new markets and limited action to deploy capacity to where it was needed.

Dr. Chingosho noted that the fleet in use by airlines comprised 45% aircraft with less than 120 seats with 78% of these carrying less than 110 passengers. The overall fleet comprised 680 aircraft, of which 50 were jet and 160 turboprop.However; there were less than 10 dedicated freighters.

He said the forecast was that African airlines would require between 780 and 1050 aircraft in the next 20 years, 80% of which would be single-aisle models.

On the financial status, he highlighted that as global airline revenues grew by 15% to US$ 554-billion in 2010 with African airlines share of the profit being $100-million, 15 of the reporting African airlines revenues grew by 6% to $9,4- billion against operational expenses of $8,6, billion. The continents cost of travel was still the highest in the world at 18, 5 US cents per revenue kilometer compared with 15,3 and 11, 0 US cents for Asia and the United States respectively.

This, Dr Chingosho said, was attributed largely to African airlines not opening up markets as some governments still restricted granting of the Fifth Freedom rights to other African carriers and the lack of rational use of fleet. This, he pointed out, was due to aircraft optimization that was partly due to the low economies of scale, the use of wrong equipment with thin routes and the high taxes levied on air travelers.

Business Plan

Dr. Chingosho outlined how AFRAA was implementing the three-year business plan by acting on clear targets including safety. This was a key factor, he said, and safety measures should be taken to ensure standards were maintained including airlines undertaking IOSA certification.

He added that the association would organize a safety seminar in the DRC Congo to address safety concerns there as the country had the lowest safety standard in the continent.

To address industry costs, governments should not use the industry as a source of funds to balance national budgets. Therefore, the high taxes levied on the industry needed to be reduced, as there was need to ensure that airlines collaborated so that they could enjoy economies of scale.

Dr. Chingosho revealed that the association would begin a joint fuel purchase programme this year to which nine airlines had agreed, as this would help reduce fuel cost that usually amounted to 40% of the operating costs.

On human resource development he noted that the association had facilitated 16 courses which benefited 430 personnel from over 30 airlines, There was a need to invest in training so as to meet the growing need of skilled personnel.

He noted that there was also a need to commit to an environmentally-Sustainable growth with airlines committing to modernizing their fleets so as to reduce fuel burn.

Changing topics, Dr. Chingosho said: “Opportunities abound as Africa is a continent with a population of over a billion people with only 10% who have been in an aircraft, a fact that has been attracting carriers from outside Africa.”

Concluding his address, Dr. Chingosha added: “There is a new economic order with power shifting to the east as the Asia Pacific region now constitutes 30% of air transport business. However, Europe-Africa still retains the major traffic market, with slot allocation, blacklisting and the emission trading scheme (ETC) tending to marginalize African carriers.”

Among the resolutions passed by the assembly was one calling on African airlines to pursue viable commercial joint projects and work together to survive fierce competition from non-African airlines. It was also resolved to call upon African governments whose airlines are on the EU banned list to enhance their oversight capacity and for the AU and AFCAC (African Civil Aviation Commission) to engage the EU for acceptable approach to jointly address safety concerns and to intensify safety training.

It was further resolved to call upon African governments to adopt policies that facilitated retention and free movement of labour within the continent; to create a comprehensive database of training institutions and to harmonize all aviation education and training institutions by designation of centre’s of excellence in addition to encouraging investment in aviation training.

AFRAA Elections

The assembly elected Eng. Hussein Mossoud as the chairman of the executive committee in addition to Inati Ntshanga, CEO of South African Express, and Sergio Rosa, CEO of Air Bukina, as first and second vice-chairmen.

Abderahmane Berthe, CEO of Air Mali, was elected as president of AFRAA and host of the 2012 AGA to be held in Bamako, Mali, in November 2012.

Awards

During the award ceremony, Ethiopian Airlines was crowned as AFRAA Airline of the Year and Kenya Airways was conferred with the Outstanding Service Award-International Operations. Air Mali and Air Bukina were jointly awarded the Outstanding Service Award –Regional Operations.

Mohamed Ghelala, former CEO OF Air Bukina, was granted the Distinguished Service Award with other individual achievement awards going to Gervais Djondo,chairman of ASKY Airlines,Aro Girma Wake, former Ethiopian Airlines CEO, and Olumuyiwa Aliu,Nigeria's representative on the ICAO Council.

Through the airline association’s airlines are able to bargain on their behalf for competitive prices on fuel, spare-parts, airport landing fees, parking fees, navigation fees and other taxes levied on airlines and passengers. Through associations airlines are able to come up with airfares within the published airfares to avoid undercutting and overpricing. There is rotation of association’s officials who are elected on an annual basis, who brings in ideals, innovations to the airline association which are able to assist airlines to be profitable and operate safe.

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