Earlier this month, a delegation from the Arab Civil Aviation Organisation (ACAO) met with their African counterparts from the African Civil Aviation Commission (AFCAC) during a meeting in Abu Dhabi.
The gathering was attended by Saif Mohammed Al Suwaidi, Director-General of the UAE General Civil Aviation Authority (GCAA) and, according to the WAM state news agency, the discussion focused on ways to help “create new air routes, expand airline networks, and establish an open-air policy between African and Arab countries”.
The meeting demonstrates that both sides are keen to deepen connectivity between the two regions and while UAE carriers, especially Emirates airline and Flydubai, have expanded their networks into Africa, they face some major challenges in their bid to exploit the full potential of this underserved and “important” market.
Healthy seat factors
“We currently operate to 23 destinations across 20 countries in Africa, along with additional freighter destinations, and we have seen consistent growth across the region. Emirates has maintained healthy seat factors on our African routes this year, even as we added capacity to serve demand,” Orhan Abbas, senior vice president – Commercial Operations (Africa) at Emirates, told Arabian Business.
“We have also expanded our codeshare with South African Airways to enable even greater connectivity, and we have a longstanding codeshare with Air Mauritius. As a region, Africa presents us with a lot of opportunities and huge growth potential which remains underserved,” he added.
However, despite plans to boost capacity on its existing routes, Abbas conceded that, despite the carrier being “always open to new opportunities”, it has “no immediate plans to operate to new destinations in Africa”.
Security concerns
Like many international airlines, Emirates faces important obstacles in its bid to expand its operations in Africa. Issues such as constrained airport infrastructures at some airports and concerns over safety and security have arisen.
Only this month British Airways and German carrier Lufthansa temporarily suspended flights to Cairo over safety concerns.
The issue of a lack of availability of hard currency, currency devaluations and sudden changes in financial policies in some African countries also make it difficult for airlines to formulate long-term investment strategies in Africa.
“With the effective mortality rate of airlines [in] Africa being nearly one every year, there lies an immense need to create effective hub connectivity; and Gulf carriers have clearly stepped up to the plate with the fleet they have; and helped bridge the gap,” aviation consultant Mark Martin, founder of Martin Consulting, told Arabian Business.
Martin believes that Africa is “a market that cannot be ignored” and while “flying into Africa is a ‘no-brainer’ as the market is waiting to be tapped into” he conceded that expansion into the continent “comes at some level of safety, security and operational risk”.
Low yields
London-based Saj Ahmad, chief analyst at StrategicAero Research, was more damning in his assessment of the challenges Africa poses for UAE airlines.
“Africa is an enigma. While there is potential in traffic growth, the yield isn’t there and it makes little sense to ply in with capacity that erodes margins. Looking at established airlines like Kenya Airways who are in a financial mess, it’s not hard to see why GCC airlines are cagey about the region,” Ahmad said.
“To that end, Ethiopian Airlines has stepped up its game in the absence of meaningful competition, and its unlikely GCC airlines see value in pitting themselves head to head and risk losing money for the sake of market share. That’s not a sustainable model,” he added.
Emirates’ partner airline, Flydubai, launched one of its first flights to Africa ten years ago when it touched down in Alexandria on June 9, 2009. It now operates 12 flights to the continent.
“Africa is an important market for Flydubai and we are delighted that 5.3 million passengers have chosen Flydubai from our network in Africa since the airline’s launch in 2009. We continue to see strong demand for direct air links and last year Flydubai contributed 13 percent of the total growth at Dubai Airports for the African market,” Sudhir Sreedharan, senior vice president, Commercial Operations (UAE, GCC, Indian Subcontinent and Africa) at Flydubai, said in a statement.
As Martin points out, as Africa’s tourist market develops the infrastructure will catch up and this will benefit the airline’s potential for further expansion.
“There are the ‘niche’ markets there too. Seychelles, for example, gets the finest fleet from the Gulf because that is a super-premium niche holiday destination – so clearly Africa does have a lot to offer global airlines,” he said.
Abu Dhabi-based Etihad Airways, which flies to 24 countries in Africa, did not respond when asked to comment.
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