africa air transport issues
TRANSCRIPT
KEY FACTS� 16.6% world population
� < 3% world traffic
� 6.2 millions jobs
� 55.8 billion GDP
� 349 commercial airports
� 161 airlines
� 1,277 aircraft in service
� 36 ANSPs
3
� 1,130,000 flights
� 236 billion RPKs
� 98 millions passengers
� 968,000 tonnes of freight
� Average regional LF: 68%
� $1.66 loss per passenger carried
(worldwide average $9.27 profit)
Source : ATAG 2018 / Worldometer
AFRICAN PASSENGER AND CARGO MARKET EVOLUTION 2008 – 2017
In 10 years, passenger market has evolve by 67%, despite a small regression in 2011. The average annual growth rate is 6.13%.Intra African traffic is almost steady.
560 580
689 705788.5 781 777 817
866968
0
200
400
600
800
1000
1200
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Thou
sand
s of
tons
Cargo
year
The cargo market grew up to 72,85% between 2008 and 2017.The average annual growth rate is 6.44%.
Source : AFRAA
KEY FACTS
27.0 29.3 33.9 32.8 36.243.1 42.6 41.7 42.0 44.7
53 53.261
5663
73.8 76.6 79.5 83.8988.54
0
20
40
60
80
100
120
140
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Mill
ions
PassengersTotaltraffic
Intra-Africa
year
4
TOP 5 AFRAA AIRLINES PER RPK 2017 TOP 5 AFRAA AIRLINES PER TONS 2017
35
20
18
17
10
0 10 20 30 40
Ethiopian Airlines
South African Airways
Egyptair
Royal Air Maroc
Kenya Airways
Billions of RPK
386
143
113
56
25
0 100 200 300 400
Ethiopian Airlines
Egyptair
South african
Kenya Airways
Royal Air Maroc
Thousands tons
Ethiopian Airlines is leading both rankings.Source : AFRAA
KEY FACTS
5
21.2
16.0
10.7
10.2
9.4
7.8
7.3
6.2
5.8
5.5
0 5 10 15 20 25
Johannesburg
Cairo
Cape Town
Addis Ababa
Casablanca
Algiers
Nairobi
Lagos
Tunis
Durban
Millions Passengers
TOP 10 AIRPORTS PER PASSENGERS 2017
Source : ACI Africa
AFRICAN PASSENGER SPLIT 2017
Domestic23.4%
Regional27.2%
Intercontinental49.5%
Source : AFRAA
Intercontinental market segment remains the biggest with 49.5% of all passengers.
South Africa has a strong position in terms of passengers traffic with 2 airports on the top 10.
KEY FACTS
6
ISSUES
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• Market elements= people, goods, capital, services• Single market = free movement • African countries have more economic and trade
relations with non African countries.• Intra Africa trade is only 15% (Source: Afreximbank)
• Poor intra-Africa connectivity• 50 to 80% connectings passengers across Africa• Huge waste of time and money
MARKETACCESS
CONNECTIVITY
ISSUES
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• Average higher fares compared to other regions• No viability for LCCs in high cost environment• Main reasons = high cost of operations
ü Fuelü Taxes and charges
• Need for adequate infrastructure • Cost commensurate with service provided• Recommend users consultation• Encourage investment models which do not
create a huge burden on users
HIGH FARES
INFRASTRUCTURE
ISSUES
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• SAATM launched in January 2018• 2018 SAATM implementation action plan (6 pillars)• 28 states have signed so far
ü 2 states implemented the 8 concrete measures
• Legal instrumentsü Power and functions of the Executing Agencyü Consumer protection rulesü Competition rulesü Dispute settlement mechanism (not yet)
SAAT
M
ISSUES
10
BENEFITS EXPECTED• Better connectivity• Lower fares• Increase Air traffic • Increase Economic growth (GDP)• Create more JobsSA
ATM
ISSUES
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Need to establish:• Dispute settlement Mechanism• Eligible airline criteria• Subsidies – State aids guidelines• Economic regulation to address any
issue that can create a distortion in competitionSA
ATM
ISSUES
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• CORSIA is not well known by some stakeholders
• Airlines need to report emissions for international flights since January 2019
• IATA / AFRAA wokshops to assist airlinesCO
RSIA
CHALLENGES
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• Fuel (+24.7% 2017 on 2016)
• Taxes and charges
• Customs regimes
• Monopolistic environment
• Traffic to double every 15 yrs
• 20 yrs projection:
ü 29,000 Pil, 29,000 Eng, 28,000 Cc
• Training and retention of professionals
• Youth Development in Aviation
HIGH COST
HUMAN
RESOURCES
CHALLENGES
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• Shared responsibility of stakeholders:ü Abuja targets(jan 2013) - revised 2017 (ANS)ü Windhoek targets (Jul 2017)ü 2018 Jet operations: 0 hull losses, 0 fatalitiesü 2018: 2 fatal turboprop accidentsü Improvement needed on turboprop fleetü IOSA registration
• Infrastructure (facilitation and cost)• Aircraft (ageing fleet)• Private Equity (to sustain growth)
SAFETYSECURITY
AVIATION FINANCING
CHALLENGES
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• Foreign currency shortages due to economic challenges
• Airlines cannot repatriate their sales revenues• Hampers airlines performances
BLOCKED FUNDS
OPPORTUNITIES
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• Growing African Economies (World Bank)ü 3,6% average projection 2019-20
• Emerging middle and upper middle classü Falling level of povertyü Literacy rate among the young exceeds 70%
• Growing population (to double by 2050) ü Share of global population in 2050 = 50%ü Share of under 14 years in 2100 = 48%ü Medium age below = 20
EXTERNALFACTORS
OPPORTUNITIES
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• Aviation advantage over other modes of transport• Potential future air transport demand
ü Double every 15 years• AU flagship projects
ü SAATMü CFTAü Free movement protocol - African Passport
EXTERNALFACTORS
STEPS FOR SUCCESS !
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AUCAFCAC
• Liberalization (SAATM implementation)• Continental Free Trade Area (CFTA)• Protocol on Free Movement of Persons – Afr. Passport• Enforce economic regulation capacity of the EA
ü Propose regulatory guidelines to YDü Remove any market distortionü Taxes and charges
• Need to review the African Civil Aviation Policy
STEPS FOR SUCCESS !
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STATES
• Commit to SAATM and CFTA• Enact concrete immediate 8 measures• Put aviation development as a priority in
their policies• Review visa regimes• Review taxation regimes• Strengthen civil aviation oversight capacity
STEPS FOR SUCCESS !
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AIRLINES
• Need to better cooperateü Networkü Commercialü Technical
• Improve leadership and management • Build human resources capacity• Improve and keep safety level