For this month's aviation industry webinar, Deirdre Fulton and John Grant were joined by Ogaga Udjo, MD of ZA Logics, to take a deep dive into Africa's aviation landscape.
The live panel discussed:
- Growth trends - what are the fastest growing markets on the continent?
- Airline business models - do those that work elsewhere work for Africa?
- What opportunities and challenges lie ahead?
A Look at Growth Trends
First, the panel discussed global growth trends and Africa's capacity and frequency changes:
- Capacity for this summer is expected to be 3.3% ahead of 2024
- In Africa domestic growth has contracted but international capacity is up by 3.5%
- Looking at total capacity growth in Africa by subregion highlights that growth is happening across the continent with the exception of Central/Western Africa. Southern Africa sees the highest growth rate, with an increase in capacity this summer of 9.6% on last summer
- Frequency growth follows a similar trend
Ogaga gave his insights on the global outlook:
exploring the Carrier Landscape
Next, the panel discussed the African carrier landscape. There were some interesting points to explore:
- In the last 10 years, Ethiopian has moved up to become Africa’s largest carrier, with 17% of African capacity
- SAA, once the largest carrier, is now 11th largest in the continent
- 8 of the Top 20 largest carriers operating in Africa are domiciled outside of the continent
- In April 2015 there were 88 African domiciled carriers and today there are 109, but there are 37 carriers in April 2015 which don’t exist today
Which business model dominates in the continent?
Next, the panel discussed business models:
- Africa lags behind the global norm for legacy/LCC capacity shares, where 35% of seats operate on low cost carriers (LCCs). Some regions are considerably higher than that, notably Europe, where 44% of seats operate on LCCs, and Latin America where the comparable share is 40%
- The region seeing the fastest degree of LCC penetration is the Middle East where in the last 10 years, LCC shares have grown from 15% to 29%. Africa’s LCC share remains stuck at 16% of all operations, an increase from 9% in 2015. This is largely driven by the growth of European –North Africa services into Morocco
Will LCCs ever take off in Africa? Or is a different model needed for success?
Watch the webinar in full here:
