In the business of travel and tourism - air connectivity is paramount.
The inter-connectivity of the two industries to propel economic growth and development is complex, especially in Africa, with Cape Town Air Access (CTAA) being the poster child for the very concept.
With its recent feather of getting United Airlines to return to Africa (it ended its service to Nigeria in 2015) with a direct flight to our tip down in South – SA is leading the way.
And just last night, CTAA firmed up a co-operation agreement to develop route connectivity to one of SA’s most sought-after destinations, the Kruger National Park.
Speaking at AviaDev 2019, Wesgro CEO Tim Harris set the scene of how out of Cape Town’s top 15 routes in 2018 - six were in Africa. 2018, being a year which saw less than 2% growth in the face of a serious drought crisis.
AviaDev, now in its fourth year and focused on growing connectivity to, from and within the continent was in fact the connecting point for one CTAA’s Pan-African growth success stories – specifically the Cape Town to Kigali route which commenced in May 2018.
Harris confirmed how Rwanda Air will go from four frequencies to five frequencies in July this year, further boosting access to Zimbabwe too.
Yet these successes go a long way in highlighting the lag in implementing Open Skis policies across the continent, in the face of decades of protectionism and failure to meet the necessary infrastructure and development requirements.
But if there was any road map to get over the bureaucracy, CTAA would be it, with its trends showing that North and West Africa need to be on the development radar for SA.
Over a year in the making, discussion around the Single African Air Transport Market to fast-track Open Skies, show that consistency from all committed countries is still needed.
The declaration is crucial to grow African Air connectivity but continues to see a number of stumbling blocks, especially around the issue of 5th Freedoms, which allows for second and third destination connectivity and creates healthy but unwanted competition, according to Chris Zweigenthal, Chief Executive of Airlines Association of Southern Africa.
“There remains hesitancy for liberalisation,” he says, calling for the “practical issues of policy” to be addressed.
“If it is implemented, the same rules must apply to everybody – there cannot be exceptions to the rule. There must be more co-operations within the states, including the 26 states that have not signed".
Speaking via a pre-recorded message, Poppy Khosa the Director for South Africa's Civil Aviation Authority says, “SAATM is not happening fast enough, we need to support operators for sustainable growth.”
She did however caution for airlines and airports to “make regulators part of the process”, to avoid stumbling blocks and help smooth out the process. “We must balance the open skies with the need for regulation, safety and security”.
Africa's 71% load factor, 10% below the global average
And while Wesgro together with the private sector and Airports Company of South Africa as CTAA has succeeded in adding over 400k additional seats to the continent since its inception in 2015– sustainable growth is rooted in healthy load factors.
Because planes don’t only need bums on seats when arriving.
Flying an empty plane on either leg is not feasible under circumstances in an industry that grapples with profitability. Our national carrier being a sore case in point. The recent Iberia cancellation of one of its Joburg route to Madrid further underlining it.
Yet, Africa’s airlines are running at 71% load factor, an entire 10% below the global average. Another jarring number to come to terms with is that route connectivity is less than 33.7% served on the continent.
Further emphasising the crucial role of “responsible fleet acquisition decisions”, in a panel discussion on the" right aircraft for Africa".
Boeing for example, with its larger metal birds, only has 2% of its fleet dedicated towards regional product development in Africa. This calls into questions the issue of sustainable load. The ability of fastjet to remain profitable in regional Southern Africa immediately springs to mind – having its operation in Tanzania affected by Air Tanzania’s pricing war.
It is the 777s and other wider-bodied planes that allow for cargo development, forming a good part of the solution to future profitability projections for airlines according to Boeing. But bigger is not always better and when it comes to choosing the right aircraft for Africa’s route development there is no one-size fits all.
'Untapped $19bn annual revenue'
In recognition of the smaller percentage of developed route capacity, AviaDev’s Managing Director Jon Howell says the conference has set its sights on the “untapped $19bn annual revenue” due to the estimated unserved 66% of Africa’s aviation market.
Added to this, Beverley Schafer Western Cape Minister for Economic opportunities, speaking on the quantifiable benefits of route development, says “The AGOA trade agreement for 14 000 duty free products is unde-rutilised at only 2%.”
United Airlines connectivity will increase this, states Schafer who also underscored the industry bugbear of blockages due to visa regulation. She deplored the erosion of SA’s position as a family-friendly destination thanks to the onerous birth certificate issue implemented in 2014 – calling on the private sector to lobby government even harder.
“For us it’s absolutely the most important thing and it forms part of our Tourism Master Plan – to try and increase that one more day stay, bring back the international tourist as well as combat seasonality.”
Mike Collin, Vice President Development Sub-Saharan Africa, Hilton echoed this saying “Ease of access has a massive impact on arrivals.” He commended Senegal in particular for getting the seamless travel, arrival and departure experience right, calling it the “most professional” he has experienced to date.
Rick Taylor, Chief Executive Officer, The Business Tourism Company further expanded on how air lift is one part of the value chain and that ensuring unforgettable visitor experience, especially when considering the value of the Meetings, Incentives, Conferences and Events sector – would bolster the entire travel and tourism offering.
Taylor estimated International business event delegates each spend $366 per day, making the African MICE sector worth $1.3 trillion globally and $194bn in Africa. He suggested that the AviaDev conference this year alone in three days would contribute $384k to the Western Cape economy.
“Magnetise that Foreign Direct Investment by getting the airport and traveller experience right.”
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