Writing from the 2013 Aviation Outlook Africa conference held in Johannesburg this past week, Sudeep Ghai Managing Partner at UK-based airline consultancy Athena Aviation affirmed that despite the great challenges that African commercial aviation faces "There's a lot more hope, a much more positive attitude, around Africa. At least seven airlines have been started within the continent in the last 18 months. It's a great market, with lots of potential."
On the other hand, worldwide, aviation "is a tough industry to make money in – especially if you're an airline," he cautioned. The global average airline profit margin is just 0.1%. "Fuel prices, pilot shortages, scarce human skills, are going to continue to put pressure on airlines in Africa."
Although African airlines will acquire lots more new aircraft over the next 20 years, their competitors outside the continent, especially in Asia and the Middle East, will receive even more. He highlighted the rising importance of the Middle East in commercial aviation. "Don't lose sight of the importance of the Middle East in the aviation space. Europe is really feeling the pain from the Middle East hubs building up." And this development of major hubs has been accompanied by the development of major airlines, such as Emirates, Qatar and Turkish.
Given the fierce competition, some African national carriers and their home countries are reluctant to open up their markets. "You have to be very careful about going down the protectionist route. Protectionism doesn't necessarily benefit your airline or your country," he warned. "The great news is that there are moves to slowly liberalise the African [airline] market. Without a commercial approach, [African] airlines will not weather this period without destroying shareholder value." Often, the problems faced by African airlines are created by their own governments. "Get your governments to provide an enabling environment that is good for business," urged Ghai. Airline managements also need to be made up of the right people in the right jobs with the right mindsets. "Build a diverse and talented team with the right skills in the right places – the best people for the job," he asserted. "Accept challenge and the need for constant change."