An interesting podcast from the BBC’s Business Daily looked at why internal airlines prices in Africa are around 45% more expensive than equivalent trips elsewhere. So why are they so expensive and what impact does this have for a lot developing economies that are dependent on tourism? In many cases if you want to travel domestically in Africa it is not possible to get direct flights between major cities and in some cases the cheaper option is to fly out of the continent and then come back in eg:
Nairobi to Cape Town – cheaper to fly to Dubai and then to Cape Town than flying direct.
In Africa there are: 54 countries – 1.5 billion people – 18% of world population – but less than 2% of global air traffic is in Africa
With no discounts, no budget airlines and no direct flights to destinations Africa is losing a lot of commercial opportunities as well as tourism. Aviation directly impacts an economy’s GDP through employment, tourism (bringing in foreign currency) and trade which Africa is missing out on. Add to the fact that a lot of the African countries are landlocked and with limited road / rail networks it is essential that there is a functional airline network. A further problem is that most airlines in Africa are bankrupt.
The distance from Kinshasa (DR of Congo) to Lagos (Nigeria) is comparable distance to flying from Berlin to Istanbul. The prices in the two continents are as follows:
Berlin to Istanbul.
US$140 one-way – direct flight – 2 hours and 50 minutes
Kinshasa to Lagos
US$700 one-way – via Jo’burg (South Africa), Kigali (Rwanda) – 18 hours
One of the issues about the carriers in Africa is that the vast majority of them are in financial bankruptcy. Africa airlines are bounded by bi-lateral agreements between countries which leads to restrictions if a country is not part of an agreement. This would include taxes, restricted flight times etc. Also standalone carriers are not viable as the cost structure is very inefficient. There needs to be some sort of African alliance between national carriers if the sector is to be capable of survival and stimulate growth in the African economy. If you look at the whole of Europe they have essentially just 3 carriers:
IAG – International Airlines Group
Aer Lingus – British Airways – IAG Cargo – Iberia – Iberia Express – LEVEL – Vueling – Avios Group
Lufthansa Group
Air Dolomiti – Austrian Airlines – Brussels Airlines – Eurowings – Lufthansa Cargo – Lufthansa- Swiss International Air Lines – Edelweiss Air
Air France / KLM Group
Air France – KLM
You also have the low-cost airlines like Ryanair and Easyjet.
Ethiopian Airways – a success story
In 2004 they looked at a new strategy focusing on the future growth of Africa and Asia – they now fly 45 destinations / week. They also appointed people into senior positions from within the company and although government owned it is run like a business. Ethiopian Airways were one of the few airlines not be bailed out during the COVID-19 crisis and reconfigured 35 of their passenger aircraft into cargo and became the go-to airline for PPE globally. Back in 2003 they employed 4,000 employees, today 17,000 and they own 6 other airlines in Africa.
If 12 key countries of Africa work together to open up markets, the increased connectivity could boost GDP by over $1bn and create 150,000 jobs across the continent. In 2000 Ethiopia was one of the poorest countries in the world but now fastest growing economies in the world – third largest GDP in subsaharan Africa. Ethiopian airlines is now the largest carrier on the continent therefore a lot of the passengers pass through the capital Addis Ababa which adds to the GDP as well as bringing in foreign currency
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