Aviation consultant and former Chief Operating Officer, Africa World Airlines, Sean Mendis has said reasons why most African airlines fail within the first five year of operation in the aviation industry was due to lack of access to local capital on reasonable terms.
Mendis affirmed that this means that most African airlines are funded by entities that lack expertise in aviation and often have different or even conflicting priorities for their investments (e.g. governments, multi-industry conglomerates, high net worth individuals, etc.). This variable focus is a big reason why so many African airlines fail within their first five years.
The aviation expert in an interview with anna.aero, about Africa and its future development, said too many African airlines experience early success and become greedy, resulting in unrealistic expansion plans that eventually lead to failure. Success must stop being defined as running half-empty widebodies to London, Dubai, or Paris.
Mendis enumerated other factors that impede the growth of the industry in the continent and steps needed to address its challenges.
In no particular order, here are his thoughts:
• African aviation has quietly made huge strides to improve safety over the last decade after developing a somewhat deserved poor reputation in the past. Today, flying in Africa is safer than the global average with respect to accidents per million flights (1.18/million vs 1.35/million)
• Africa did not have the luxury of waiting for widespread vaccination to reopen borders for travel, given that most countries will take until 2023 to reach critical mass of immunity. Instead, a robust regime of both pre- and post-flight testing became the de-facto standard in over 40 African countries by October 2020. Cheaper and more reliable testing will be more important for African aviation’s recovery than vaccines will
• Intercontinental air travel demand from Africa will not rebound until 2022 at the earliest, but this will create new regional opportunities for airlines flexible enough to refocus. Expect to see traffic to Europe take the longest to rebound, with intra-African traffic poised to show recovery in the second half of 2021
Safety, reliability, affordability – in that order – key values for modern African consumer
• Growth in African air travel demand will come from the bottom end of the market; primarily newly empowered middle class who have increased disposable income. The prototypical modern African consumer is young, globalised, and comfortable with e-commerce. They identify with safety, reliability, and affordability (in that order) as brand values from their preferred carriers. Airlines that can create a legitimate alternative to inefficient ground transport will be the ones who are successful
• African governments tend to view air transport as a luxury and hence a soft target for increased taxation, high user fees, and subsidies to failing national carriers. Their focus should instead be on liberalisation and infrastructure development to encourage investment from the more agile private sector
• The lack of access to local capital on reasonable terms means that most African airlines are funded by entities that lack expertise in aviation and often have different or even conflicting priorities for their investments (e.g. governments, multi-industry conglomerates, high net worth individuals, etc.). This variable focus is a big reason why so many African airlines fail within their first five years
Africa airlines should remain highly focused
• Too many African airlines experience early success and become greedy, resulting in unrealistic expansion plans that eventually lead to failure. Success must stop being defined as running half-empty widebodies to London, Dubai, or Paris. There will always be a niche to partner with larger international carriers for the ‘last-mile delivery’ within a home region at the early stages of growth. Profitability must be more important than prestige
• Airlines that invest in training the best and brightest local talent in technical fields as pilots and engineers will have a competitive advantage as they mature. Overreliance on expatriates in critical roles is both expensive and unstable, and reduces the generational mentorship and transfer of skills that is so critical to institutionalise a culture of operational excellence
• Expensive factory-fresh aircraft are rarely a wise choice for African airlines. Travel throughout the continent is primarily a daytime activity due to infrastructure limitations and security concerns, and that reduces the number of hours per day that you can fly an aircraft. Airlines would be wiser to look at previously owned airframes around six-to-ten years old which can be acquired at a much more reasonable price
• Distribution and fulfillment technology is where the battle for the next generation of African consumers will be fought. Smartphones are ubiquitous throughout the continent, and airlines that can deliver a booking and payment experience via localised mobile apps will emerge triumphant. Upfront investment in the right technology will pay off many times over