Professional Documents
Culture Documents
Contents
1.
INTRODUCTION ............................................................................................ 3
2.
3.
4.
SUMMARY ................................................................................................... 27
2012 UBM Aviation Worldwide Limited. All rights reserved. A UBM plc company.
1.
Introduction
The purpose of this analysis is to review the active and changing aviation market
environment in Africa and to demonstrate challenges and opportunities for the aviation
industry.
2.
Executive summary
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
est.
GDP
1
2
3
4
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Some regions of Sub-Saharan Africa such as Nigeria, Kenya have already made a huge
step in the aviation development. Air Nigeria, formerly Virgin Nigeria, now has code share
partners to the U.S and East Africa to leverage the oil traffic from refineries in the south of
the country.5 Kenya Airways is widely considered as one of the leading Sub-Saharan
operators, becoming a full member of SkyTeam Alliance in June 2010. The carrier reported
revenues of $988 million in 2011, up 21.3% to compare with 20106. Kenya Airways is a
member of the African Airlines Association since 1977.
South Africa is the most developed country in Africa, with one of the strongest economies
of the continent driven by economic sectors such as mining and tourism. South Africa's
automotive industry is also a global industry and the country is the 20th largest consumer
of IT products and services in the world.7 South African Airways is the national flag carrier
and largest airline of South Africa. The carrier owns Mango, a low cost domestic airline,
and has established links with Airlink and South African Express. 8 South African Airways
reported revenue of $2,719.5 million in 20119, up 2% to compare with 2010.
Several countries have already realised the potential of Sub-Saharan Africa, and that it is a
good place for investments. China, for example, has stepped up its engagement with
Africa, searching the resource-rich continent in its bid to access natural resources and
develop new trade routes. But the Asian powerhouse is also emerging as an attractive
business destination for Africans, most of them eager to export goods from the worlds
second-largest economy back into their continent.10
http://dailyindependentnig.com/2012/04/nigeria-aviation-market-a-goldmine-air-nigeria-boss/
http://www.centreforaviation.com/analysis/kenya-airways-operating-profit-surges-in-fy2011-inexpansion-mode-52834
7
http://www.southafrica.info/business/economy/sectors/
8
http://en.wikipedia.org/wiki/South_African_Airways
9
http://www.flysaa.com/za/en/footerlinks/aboutUs/financialResults.html
10
http://escenariosreg.tumblr.com/post/21070247559/cnn-china-has-stepped-up-its-engagementwith
6
2012 UBM Aviation Worldwide Limited. All rights reserved. A UBM plc company.
2012 UBM Aviation Worldwide Limited. All rights reserved. A UBM plc company.
3.
407
91
Within
Africa
Europe
Middle East
22
10
Asia
North
America
Latin
America
Southwest
Pacific
Country
Jan-Jun 2011
South Africa
12,745,083
Egypt
Nigeria
Jan-Jun 2012
% Change
12,897,779
1%
7,210,038
8,002,438
11%
4,668,855
5,650,299
21%
Morocco
5,510,868
4,916,032
-11%
Algeria
3,159,975
3,288,793
4%
Kenya
2,920,590
2,873,939
-2%
Tunisia
1,916,699
2,319,514
21%
Ethiopia
1,760,859
2,010,070
14%
Sudan
1,777,124
1,833,082
3%
10
Libya
1,552,114
1,175,382
-24%
The most developed aviation market by capacity between January and June 2012 in Africa
is South Africa, which has had modest growth of 1% year on year. Egypts year on year
growth is mostly due to the loss of capacity experienced at the start of 2011 due to the
political changes that took place in the first half of the year. Nigeria is experiencing strong
11
2012 UBM Aviation Worldwide Limited. All rights reserved. A UBM plc company.
growth in the country with new operations of Etihad Airways, Air Niamey and Royal
Jordanian from 2012.12
3.2 Emerging markets
The growth witnessed in passenger traffic in the African emerging markets stands as a
testimony to the importance of the region in the development of the civil aviation
infrastructure. Some of the countries in the region are spending millions of dollars to
satisfy the demands of the increased air traffic.13
Top 5 fastest growing countries by capacity over the past 5 years (Jan-Jun) by average annual growth
Ranking
Country
Jan-Jun
2008
Jan-Jun
2009
Jan-Jun
2010
Jan-Jun
2011
1
2
Rwanda
117,438
148,409
168,075
184,819
323,206
22%
20,030
26,760
32,673
28,961
51,840
21%
529,231
790,088
921,577
1,057,511
1,158,525
17%
Burundi
52,460
52,863
65,684
84,719
106,939
15%
Eritrea
85,789
72,974
93,019
119,443
172,906
15%
3
4
5
Jan-Jun
2012
AAGR
Qatar Airways and South African Airways started new operations in 2012 in Rwanda
helping to raise the average annual growth rate to 22% over the 5 years period. Also Air
Nigeria & Ceiba Intercontinental Airlines established their flights to Sao Tome & Principe
Islands in 2012 which nearly doubled capacity to the islands giving an average annual
growth of 21%.14 The development of these countries is determined by the mineral
resources held and increasing tourism.
3.3 Investments
3.3.1
China in Africa
In 2006, China announced plans to set up Strategic Mineral Reserve to supply uranium,
copper, aluminium, iron and other minerals from the African mines to China. The reserves
are crucial for China and Africa plays a critical role in the provision of key minerals for the
Chinese economy. China almost depends on Sub-Saharan Africa for its imports of cobalt
with manganese from Gabon, South Africa and Ghana. Sub-Saharan Africa is also an
important supplier of timber mainly from Gabon, Republic of Congo, and Cameroon, and
chromium mainly from South Africa, Madagascar, and Sudan. China has shown a growing
interest in the mining belt of central southern Africa, including Zambia, Tanzania, and
12
13
14
2012 UBM Aviation Worldwide Limited. All rights reserved. A UBM plc company.
Mozambique. This area is well endowed with copper, iron, gold, manganese, and other
base metals.15
The China-Africa Development Fund was set up in March 2007 with capital provided by the
China Development Bank and is shifting its investment with the focus now on
infrastructure, manufacturing and agriculture, after a capital injection of $1 billion, and
earlier this year it received a further $2 billion to develop the African market and transfer
technology. It has set up branches in South Africa, Ethiopia and Zambia.16
Source: http://www.grida.no/graphicslib/collection/african-
environment-collection
15
16
http://www.ide.go.jp/English/Data/Africa_file/Manualreport/cia_08.html
http://www.chinamining.org/News/2012-04-13/1334287347d56033.html
2012 UBM Aviation Worldwide Limited. All rights reserved. A UBM plc company.
3.3.2
Shell and BP South African Petroleum Refineries operates as an oil refinery company and
its products include petrol, diesel, jet fuel, lubricating oil, liquid petroleum gas, paraffin,
solvents, bitumen, marine fuel oil, and chemical feed stocks. The company was founded in
1960 and is based in Durban in South Africa.17
In 2012, BP and Shell are looking at a $4bn (2.5bn) stake in a gas field in Mozambique, a
sale that would confirm East Africa as one of the largest growth areas in world energy. Eni,
the Italian oil and gas giant is looking to sell down its 70 percent stake to find a partner
who can help shoulder the capital expenditure.
Shell has already shown its interest in the region with a near 1bn bid for London-listed
Cove Energy, which is significant for holding a 8.5 percent stake in another field off the
coast of Mozambique.
BP has been linked to a potential tie-up with Ophir Energy, a well-regarded FTSE-250
group that has potentially substantial discoveries off both the west and east coasts of
Africa. It is understood that BP did talk to the company about taking a stake in a
Tanzanian offshore field.18
17
18
http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=46452400
http://royaldutchshellplc.com/2012/03/18/bp-and-shell-fight-over-african-oil-find/
2012 UBM Aviation Worldwide Limited. All rights reserved. A UBM plc company.
500
1000
1500
2000
2500
3000
3.4 Tourism
Countries in Africa are focusing on tourism as a source of growth and diversification, but
most countries have only barely developed their tourism potential. Nowadays, tourism is
the fastest developing enterprise in Africa and currently one of the continents major
investment opportunities including aviation and transport markets.19 Africa is an unusual
tourist destination as its attractions are quite different from those of the rest of the world.
It has become clear that as tourism develops, the host countries emphatically favour
tourism due to the benefits brought to the country. It has also become clear that making
money out of tourism has its challenges and that tourism interacts with ecological, political
and cultural dynamics that may run in contrast to the economic needs of the tourism
industry.20 The most often visited by tourists countries in North Africa are Egypt, Morocco
and Tunisia, and in Sub-Saharan Africa tourists are more likely to visit South Africa,
Mozambique, Zimbabwe, Botswana and Kenya.21
19
20
21
http://tradeinservices.mofcom.gov.cn/upload/2008/08/07/1218091810289_2900280.pdf
http://www.ascleiden.nl/Pdf/Infosheet3engels.pdf
http://www.nabc.nl/Portals/0/docs/Tourism%20Statistics%20World%20Tourism%20Organization.pdf
2012 UBM Aviation Worldwide Limited. All rights reserved. A UBM plc company.
10
3.5 Frequency
Growth Rate
2003
2004
2005
2006
Within Africa
2007
2008
2009
2010
2011
From Africa
Frequency within/from Africa year-on-year is steadily growing over the last decade at an
average rate 4.5%. The international trend slows down in 2006 to 0% with a rebound in
growth in 2007 to 10%.22 At the same time, the domestic trend dropped to -2% in 2006 to
rise in 2007 to 8%.
The year 2006 was full of activity in the African aviation market. South African Airways
joined Star Alliance in April 2006 and Delta Airlines launched its first flight between Atlanta
and Johannesburg, following other flights to Luanda in Angola, Malabo in Equatorial
Guinea, Abuja in Nigeria, Nairobi in Kenya and Monrovia in Liberia.23 But despite Delta's
attempt at the "great African Expansion" and the Star Alliance membership of South
African Airways in 2006, many flights have failed to materialize between Africa and other
continents, recognizing that there was a large gap in the market. 25 carriers such as East
African Safari Air, East Star Airlines, Jetlink Express, Regional Air and South African
Airways and others stopped some services between 2005 and 2006 generally to and within
Kenya, Nigeria, Togo and South Africa due to certain financial difficulties or restructure,
causing a drop in the 2006 trend.24 The second drop in the trend in 2009 was a result of
the global economic, only managing a 2% growth rate for flights from Africa and 1% for
flights within Africa as international trend scaled back throughout the downtown.
22
23
24
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11
3.6 Capacity
Growth rate
2003
2004
2005
2006
2007
Within Africa
2008
2009
2010
2011
From Africa
South African
Airways
Comair
Kenya Airways
Egyptair
Ethiopian Airlines
Royal Air Maroc
Air Algerie
South African Express
Aerocontractors
Air Nigeria
Mango
Precisionair
TAAG - Angola
Airlines
South African Airlink
LAM-Linhas Aereas
De Moca
Air Austral
Air Madagascar
Air Mauritius
Dana Airlines
Tunis Air
CODE
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
SA
MN
KQ
MS
ET
AT
AH
XZ
NIG
VK
JE
PW
27%
13%
7%
13%
6%
7%
10%
0%
0%
0%
0%
1%
29%
12%
7%
12%
6%
7%
10%
0%
0%
0%
0%
1%
29%
10%
7%
11%
7%
7%
9%
0%
0%
0%
0%
2%
28%
9%
7%
11%
7%
8%
10%
0%
0%
0%
0%
2%
28%
6%
8%
11%
7%
9%
9%
0%
0%
1%
0%
2%
26%
7%
9%
11%
8%
10%
8%
0%
0%
4%
0%
2%
23%
7%
9%
12%
8%
9%
7%
1%
0%
4%
2%
3%
20%
6%
8%
13%
7%
9%
6%
5%
0%
4%
4%
3%
18%
8%
8%
12%
8%
8%
6%
5%
0%
3%
4%
3%
16%
12%
8%
11%
7%
7%
5%
5%
5%
3%
4%
2%
14%
13%
8%
8%
8%
7%
6%
5%
5%
4%
4%
3%
DT
4Z
1%
4%
2%
4%
1%
4%
1%
4%
1%
4%
1%
4%
1%
4%
3%
4%
3%
3%
3%
3%
3%
3%
TM
UU
MD
MK
9J
TU
2%
2%
4%
2%
0%
1%
2%
2%
2%
2%
0%
1%
2%
2%
4%
2%
0%
2%
2%
3%
4%
2%
0%
2%
2%
3%
4%
2%
0%
2%
2%
2%
3%
2%
0%
1%
2%
2%
3%
2%
0%
1%
2%
2%
2%
2%
0%
1%
2%
2%
2%
2%
1%
1%
2%
2%
2%
2%
1%
1%
2%
2%
2%
2%
1%
1%
2012 UBM Aviation Worldwide Limited. All rights reserved. A UBM plc company.
12
South African Airways has seen its market share decline from 27% in 2002 to 14% in 2012
for flights within Africa, with Kenya Airways seeing the overall capacity share increase of
1% point over the past 10 years.
2%
3%
3%
3%
2%
2% 2% 1%
14%
4%
13%
4%
5%
8%
5%
6%
8%
7%
8%
CODE
Egyptair
Royal Air Maroc
Air France
Emirates Airlines
Air Algerie
Tunis Air
Saudi Arabian
Airlines
Ryanair
Ethiopian Airlines
British Airways
South African
Airways
Aigle Azur
easyJet
Qatar Airways
KLM-Royal Dutch
Airlines
Turkish Airlines
Lufthansa German
Airlines
Thomson Airways
Kenya Airways
Jetairfly
MS
AT
AF
EK
AH
TU
2002
16%
8%
17%
2%
10%
10%
2003
15%
10%
17%
3%
9%
9%
2004
14%
11%
16%
4%
9%
8%
2005
13%
12%
16%
5%
8%
8%
2006
13%
12%
15%
5%
8%
8%
2007
13%
12%
14%
7%
7%
7%
15%
12%
13%
7%
6%
6%
16%
10%
12%
8%
6%
7%
15%
9%
11%
8%
6%
6%
15%
9%
10%
8%
6%
6%
14%
11%
10%
7%
6%
6%
SV
FR
ET
BA
5%
0%
2%
7%
5%
0%
2%
7%
5%
0%
2%
7%
5%
0%
2%
7%
4%
0%
3%
7%
4%
0%
3%
6%
5%
1%
3%
6%
5%
1%
3%
5%
5%
2%
3%
5%
4%
4%
3%
5%
5%
4%
4%
4%
SA
ZI
U2
QR
9%
0%
0%
1%
8%
0%
0%
1%
7%
1%
0%
1%
7%
3%
0%
1%
8%
3%
0%
2%
7%
4%
0%
3%
6%
5%
1%
3%
5%
5%
2%
3%
4%
4%
3%
4%
4%
4%
3%
3%
4%
4%
4%
3%
KL
TK
5%
1%
5%
1%
5%
1%
5%
1%
5%
1%
5%
1%
4%
1%
4%
2%
4%
3%
4%
3%
3%
3%
LH
TOM
KQ
TB
4%
0%
2%
0%
4%
0%
2%
0%
4%
0%
2%
0%
4%
0%
3%
0%
4%
0%
3%
0%
4%
0%
3%
0%
4%
0%
3%
0%
4%
0%
2%
0%
4%
2%
2%
0%
3%
3%
2%
0%
3%
3%
2%
0%
2012 UBM Aviation Worldwide Limited. All rights reserved. A UBM plc company.
2008
2009
2010
2011
13
2012
The largest airline flying to Africa is EgyptAir with 14% market share which shows 2%
points drop in 2012 to compare with 2002. Air France indicates the same level of an
average growth but its market share dropped 7% points from 17% in 2002 to 10% in
2012.25
3%
3%
3%
3% 3%
2% 0%
14%
4%
11%
4%
4%
10%
4%
4%
4%
7%
5%
6%
6%
Egyptair
Royal Air Maroc
Air France
Emirates Airlines
Air Algerie
Tunis Air
Saudi Arabian Airlines
Ryanair
Ethiopian Airlines
British Airways
South African Airways
Aigle Azur
easyJet
Qatar Airways
KLM-Royal Dutch Airlines
Turkish Airlines
Lufthansa German Airlines
Thomson Airways
Kenya Airways
Jetairfly
80%
60%
92%
86%
Mainline
40%
LCC
20%
0%
8%
14%
2002
2012
The contribution of Low Cost Carriers in market share to and within Africa grew by 6%
points over the last decade. The LCCs year-on-year percentage growth rate are currently
25
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14
averaging 16% vs mainline carriers of only 5%. In Europe and the US, LCCs now account
for 40% and 30% respectively of the total capacity. 26
1
2
3
4
5
6
7
8
9
10
LCC Name
Comair
1Time
Mango
Ryanair
EasyJet
Jetairfly
Five Forty Aviation
Iberia
Air Arabia Maroc
Transavia.com (France)
Capacity 2012
3,254,886
2,308,057
1,679,952
858,060
800,292
756,323
710,118
454,764
415,863
344,186
40%
20%
0%
-20%
-40%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
LCC
Mainline
26
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15
ORIGIN CODE
ORIGIN
2012
JNB
13,061,108
CAI
Cairo Egypt
10,338,329
CPT
5,450,363
LOS
Lagos Nigeria
5,394,798
CMN
5,285,746
NBO
Nairobi(Intl) Kenya
4,549,592
ADD
3,827,414
TUN
Tunis Tunisia
3,462,466
ALG
Algiers Algeria
3,410,853
10
DUR
3,095,772
11
ABV
Abuja Nigeria
2,761,773
12
KRT
Khartoum Sudan
2,359,773
13
RAK
Marrakech Morocco
1,919,998
14
ACC
Accra Ghana
1,842,972
15
MRU
Mauritius Mauritius
1,704,509
16
SSH
1,651,181
17
HRG
1,514,800
18
DAR
1,468,275
19
LAD
Luanda Angola
1,428,467
20
RUN
St-Denis Reunion
1,392,075
21
DKR
Dakar Senegal
1,359,856
22
TIP
Tripoli Libya
1,202,581
23
EBB
Entebbe Uganda
1,062,623
24
HBE
1,021,318
25
HLA
1,016,458
26
PHC
999,023
27
PLZ
954,812
28
DLA
Douala Cameroon
860,947
29
ABJ
786,989
30
AGA
Agadir Morocco
781,247
6%
6%
5%
23%
Lagos Nigeria
7%
Casablanca(Mohammed V.) Morocco
8%
18%
Nairobi(Intl) Kenya
9%
9%
9%
16
The biggest airport by capacity 2012 in Africa is Johannesburg (Tambo) in South Africa
with market share of 23% in Africa and 52% market share in South Africa. The airport
developed over last 5 years at the average growth level of 1% and the growth is slower
compared to Cairo Airport with an average growth rate of 5% over last five years.
27
3.10.1
Actual fleet
17%
AIRBUS
43%
13%
EMBRAER
FALCON
10%
2% 2% 3% 3%
3%
4%
GULFSTREAM
ANTONOV
BOMBARDIER
DOUGLAS
OTHER
27
2012 UBM Aviation Worldwide Limited. All rights reserved. A UBM plc company.
17
The fleet mix in Africa is dominated by Boeing and Cessna aircraft accounting for 30% of
the African operated fleet alone. The Boeings have an average age of 18.6 years, whilst
the Cessnas are popular to provide transport into and out of the more remote areas of
Africa.28
The integration of the African economies with the global economies has been largely
improved through the development of air transport. Moreover, it has lifted the comparative
advantage of most African countries and especially Nigeria where air services have been
reliably linked to the development of tourism developments.29
Growth rate
40%
30%
20%
10%
0%
-10%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Scheduled capacity year-on-year growth 2002-2012 in Nigeria
28
29
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18
The year-on-year capacity growth trend is showing an average level of 15% in Nigeria.
Only in 2007 and 2008 the trend dropped to -4% following a spate of aircraft incidents
2005 and 2006and the input of the financial crisis causes several carriers to stop
operations due to the decline in air travel as business and leisure travellers reduced their
spending.30 With a steady recovery from recession since then, the Nigerian aviation
industry has seen increased passenger traffic and air travel in 2009 to 41% of scheduled
capacity year-on-year growth.
2% 2% 2% 2%
Arik Air
3%
Aerocontractors
38%
10%
Air Nigeria
Dana Airlines
13%
26%
Ethiopian Airlines
Lufthansa German Airlines
Air France
Top 10 carriers by scheduled capacity 2012 in Nigeria
The largest airline in Nigeria by capacity 2012 is Arik Air with 38% market share. The
carrier started operations in 2006 and since then the carrier has been aggressively
expanding. The largest year-on-year growth of 321% was in 2009 after Arik Air was given
permission by the US Department of Transportation to fly to the United States.31
Lagos Nigeria
Abuja Nigeria
2% 2% 2% 1%
4%
Kano Nigeria
9%
49%
Owerri Nigeria
Enugu Nigeria
25%
30
31
http://www.ciuci.us/wp-content/uploads/2011/12/Flights-or-Plights.pdf
OAG Schedules iNet
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19
Lagos Airport and Abuja Airport are the two largest airports in Nigeria by capacity with
market share 49% and 25% respectively in 2012.
Murtala Muhammed International Airport (Lagos Airport) is an international airport located
in Ikeja, Lagos State, Nigeria, and is the major airport serving the country. The Lagos
State Government established the Lagos Airport Development Company only for the
purposes of managing the development of the airport. The primary objective for the
development is to complement and support the Murtala Mohammed International Airport
(Lagos Airport), additionally, it is the states desire for the airport to develop into the a
new hub for business and travel in the west African region.32
South Africa is a very popular tourist destination, with most of those tourists arriving from
outside the African continent. Today, South Africa is the powerhouse of Africa, the most
advanced, broad-based economy on the continent, with the infrastructure to match any
first-world country.33
32
http://www.lekkizone.com/index.php?option=com_content&view=article&id=47:lagosairport&catid=34:press-releases
33
http://www.southafrica.info/about/quickguide.htm
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20
Growth rate
Over the last decade the year-on-year capacity trend is growing at an average of 4%. Only
in 2009 there was a decline to -2% due to the global economic recession. The large
increase seen in 2007 by 14% was a result of South African Airways joining Star Alliance in
April 2006 and the carrier increasing its fleet in 2007 with five new aircraft, three A340300 and two B737-200.34
1%
2% 1%
1%
Comair
British Airways
8%
10%
46%
1Time
Mango
14%
Emirates Airlines
14%
Velvet Sky
Air Namibia
Lufthansa German Airlines
Air Botswana
South African Airways (SAA) is the national flag carrier and largest airline of South Africa,
with headquarters in Kempton Park, Ekurhuleni, Gauteng 35 and with 46%36 market share
in South Africa. Besides fellow Star Alliance members, South African Airways has
codeshare agreements with the following airlines: Airlink, Air Mauritius, El Al, Emirates, SA
34
35
36
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21
Express, JetBlue Airways, LAM Mozambique Airlines, Malaysia Airlines, Mango, Qantas,
Saudia and Virgin Atlantic Airways for flights to/from Africa.37
1%
4%
Durban King Shaka Intl South Africa
12%
22%
OR Tambo International Airport (JNB) is the largest airport in South Africa, near the city of
Johannesburg. It serves domestic and international flights to/from South Africa with a 52%
market share in the country.38
Major developments to the airport took place in preparation for the 2010 FIFA World Cup,
including the expansion of the international terminal, with the new international pier,
which house the new Airbus A380, increasing capacity of the airport. A new Central
Terminal building is still under construction with an additional multi-storey car park being
built opposite the Central Terminal Building. Terminal A is also being upgraded with the
associated roadways realigned to accommodate more International Departures space.39
37
38
39
http://en.wikipedia.org/wiki/South_African_Airways#Codeshare_agreements
OAG Schedules iNet
http://en.wikipedia.org/wiki/OR_Tambo_International_Airport#Developments
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22
3.11.3 Ethiopia/Kenya
The economy of Ethiopia is based on agriculture with the current government focused on
economic reform, including privatization of state enterprises and rationalization of
government regulation but despite recent improvements, Ethiopia remains one of the
poorest nations in the world.40
Kenya's economy is market-based and compared to its neighbours, Kenya has a welldeveloped social and physical infrastructure. It is considered the main alternative location
to South Africa, for major corporations seeking entry into the African continent. 41
40
41
http://en.wikipedia.org/wiki/Economy_of_Ethiopia
http://en.wikipedia.org/wiki/Economy_of_Kenya
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23
Growth rate
25%
20%
15%
10%
5%
0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Kenya
Ethiopia
Both year-on-year capacity growth trends, in Kenya and in Ethiopia, are steadily growing,
with average growth rates of 9% in Kenya and 12% in Ethiopia.
3%
Kenya Airways
Five Forty Aviation
2%
3% 3% 2%
Precisionair
5%
Jetlink Express
5%
Emirates Airlines
9%
64%
AirKenya Express
SafariLink
Rwandair Express
Ethiopian Airlines
Qatar Airways
1%
1%
2% 1% 1%
1%
National Airways
1%
Emirates Airlines
Turkish Airlines
Saudi Arabian Airlines
Yemenia Yemen Airways
85%
Kenya Airways
Egyptair
Gulf Air
Kuwait Airways
24
The major airline in Kenya is Kenya Airways with market share 64% and in Ethiopia
Ethiopian Airlines with 85%, both of which are state annual. Kenya Airways is the flag
carrier and largest airline of Kenya. The carrier is a full member of SkyTeam Alliance since
June 2010 and fifth largest in Africa by scheduled capacity 2012 to/from/within Africa 42.
The alliance provides Kenya Airways' passengers with access to the member airlines'
worldwide network and passenger facilities.
Ethiopian Airlines serves as the country's flag carrier, and is wholly owned by the
Government of Ethiopia and is a member of Star Alliance since December 2011.43
3%
3%
1%
1%
Mombasa Kenya
1%
2%
Nairobi(Intl) Kenya
0%
Kisumu Kenya
Nairobi(Wilson) Kenya
12%
Eldoret Kenya
Malindi Kenya
76%
2%
2%
1%
1%
1% 1%
0%
0%
Mekele Ethiopia
Dire Dawa Ethiopia
Bahar Dar Ethiopia
Gonder Ethiopia
Axum Ethiopia
89%
Jijiga Ethiopia
Lalibela Ethiopia
Jimma Ethiopia
Gode Ethiopia
42
43
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25
Jomo Kenyatta International Airport (NBO) is located 18 kilometres east of the capital of
Nairobi in Kenya. The largest airport in East and Central Africa accounts for 76%44 market
share in the country. The terminal building consists of three terminals: Terminal 1 and 2
with international departures, and Terminal 3 with domestic departures and arrivals.45
Addis Ababa Bole International Airport (ADD) serves the city of Addis Ababa in Ethiopia
and accounts for 89% market share in the country46. The airport is located 6 km south
east of Addis Ababa City Centre and is the main hub of Ethiopian Airlines. The airport has
two terminals, Terminal 1 which serves domestic flights and regional international
destination and Terminal 2 which serves International flights.47
44
45
46
47
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26
4.
Summary
Africa's passenger airline industry is still in a period of growth and development and the
continent has been identified as one with huge potential. African airlines only have around
2% of the total of revenues of the traffic between Africa and the rest of the world,
potential exists for new route development. Unfortunately, the infrastructure, political and
technological challenges must be first navigated if they are to fully meet that potential.48
Africa has been for long time ignored by global investors due to chronic poverty and
political instability. The airline industry in Africa has also been ignored by global economic
players. Just a few international airlines used to fly to Africa from North America and
Europe. The African airline industry lagged far behind from the rest of the world but the
situation has been changing for the better in recent years. 49 The economic situation is
improving and an average GDP growth rate in Africa over last decade of 5% is presenting
new opportunities for investment in the country.50
Thanks to the Chinese who have realised the benefits of long term investment in the vast
natural resources in Africa, Africa is now able to attract investors from new regions.
European airlines such as British Airways have a strong presence in Africa through their
franchise with Comair as do several Middle East and Asian carriers which are aggressively
expanding their routes in the region, with the US carriers beginning to return to the African
market. Moreover, low cost carriers such Ryanair and EasyJet are opening new routes to
North Africa.51 Successful national African carriers like Ethiopian Airlines, South African
Airways, Egypt Air and Kenya Airways are starting to become more competitive with the
mega carriers of Europe, US, Middle East and Asia.
But Africa still faces many challenges and the airline industry is still over-taxed and overcharged, making it difficult to establish lower fares. Some African airports need to reduce
their overpriced fees which are well above the world average. The infrastructure needs to
be developed in line with the rate of development of the carriers and only by bringing the
governments, airlines and investors together can Africa really start to develop its potential.
48
http://edition.cnn.com/2011/10/27/business/mpa-boeing/index.html
http://www.thereporterethiopia.com/Business-and-Economy/the-thriving-african-aviationindustry.html
50
http://allafrica.com/stories/201205221139.html
51
OAG Schedules iNet
49
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27
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Written by:
Joanna Botcherby Market Intelligence Analyst
Rob Shaw Director of Analytics
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