AFRICA’S AIRLINE GROWTH – EXPECTED TO BOUNCE BACK STRONGLY

Guy Leitch.

In their much-anticipated commercial outlook for Africa, Boeing said African airlines will need 63 000 new professional staff by 2040, including nearly 20,000 pilots, 20,000 technicians and 24,000 cabin crew members.

THE BOEING REPORT COVERS the whole of the continent. While these projections may seem dramatic, the underlying assumptions are conservative. The forecast is made against the background of a predicted annual economic growth rate for Africa of 3% during the next two decades.

Boeing projects that airlines in Africa will grow their fleets by 3.6% per year to accommodate passenger traffic growth of 5.4% annually. This is however the third highest airline traffic growth rate in the world.

“Africa has healthy opportunities to expand travel and tourism, coinciding with increasing urbanization and rising incomes,” Randy Heisey, Boeing managing director of Commercial Marketing for Middle East and Africa said. “African carriers are well-positioned to support inter-regional traffic growth and capture market share by offering services that efficiently connect passengers and enable commerce within the continent,” he added. Boeing says that co-operation initiatives such as the African Continental Free Trade Area and the liberalisation attempts of the Single African Air Transport Market are expected to stimulate trade, air travel and economic cooperation. Intra-African air passenger traffic is expected to grow even more rapidly, at 6.5% a year.

Boeing expects especially strong increases in air traffic between Southern Africa and East Africa (including the Horn of Africa and north-east Africa, except Egypt).

Africa's middleclass of more than 500 million people is projected to double by 2040, driving increased demand for air travel. Africa’s strong, long-term growth prospects for commercial aviation are closely tied to the continent’s projected 3% annual economic growth over the next 20 years.

"Africa has healthy opportunities to expand travel and tourism, coinciding with increasing urbanisation and rising incomes," said Heisey.

Fleet expansion

Africa has the world’s oldest aircraft fleet with an average of 16 years, compared to the global average of 11 years. Boeing estimates that Africa's airlines will require 1 030 new airliners valued at $160 billion by 2040. About 80% of the new planes required will be due to growth on the continent, it said.

Further, the associated aftermarket business, including maintenance and repair, would be worth another $235-billion, taking the complete African airline market opportunity between now and 2040 to a total value of $395-billion.

“Africa has healthy opportunities to expand travel and tourism, coinciding with increasing urbanisation and rising incomes,” said Heisey. “African carriers are well-positioned to support inter-regional traffic growth and capture market share by offering services that efficiently connect passengers and enable commerce within the continent.”

Africa’s gross domestic product, which declined last year due to the Covid-19 pandemic, will regain its 2019 level in 2021. African private consumption has proven resilient. The continent’s working age population, which numbered 540-million in 2015, is expected to reach 1.6-billion by 2040 (for comparison, China’s working age population in that year is forecast to be 809-million, and that of India, 980-million). The number of African households in the middle income band is predicted to grow by about 90% between now and 2035.

Boeing’s 2021 Africa CMO also includes these projections through 2040:

80% of African jet deliveries are expected to serve fleet growth with more sustainable, fuel-efficient models such as the 737, 777X and 787 Dreamliner, with 20% of deliveries replacing older airliners.

Commercial services opportunities such as supply chain, manufacturing, repair and overhaul are valued at $235 billion.

In terms of categories of aircraft, 70% of Africa’s future new airliner acquisitions, totalling 740 aeroplanes, will be single-aisle airliners. These will mainly serve domestic and intra-African routes.

To service long-haul routes, 250 widebody aircraft will be required, in both passenger and freighter variants.

Strong growth awaits African airlines which survive the low loads caused by Covid.