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African air travel expected to grow 4.9% per year for two decades

2018-10-15  Edgar Brandt

African air travel expected to grow 4.9% per year for two decades

WINDHOEK  – Good news for African airlines is that air travel on the continent is expected to continue to grow at about 4.9 percent per year over the next two decades. This increase will, according to Paul Steele, Senior Vice President, Member & External Relations at the International Air Transport Association (IATA) drives growth in economic output and the jobs that are supported by the air transport industry over the next 20 years. Steele shared these sentiments at the recent Airlines Association of Southern Africa’s (AASA’s) annual assembly in Livingstone, Zambia.

Steele said the theme for this AASA AGM of “Enabling African Airline Excellence”, is forward looking and engaging, and crucial for the future development and health of African airlines and the AASA membership.

“All of us here, I am certain, recognise that aviation is a crucial sector that drives economic development at the country, regional, continental and indeed global Level,” he said, adding that aviation helps to bind Africa together and takes African exports, from fresh agricultural produce to manufactured goods and creative and cultural endeavours, to the world. 

“Air transport is also the favoured mode of transportation for more than half of the world’s tourists. Aviation has an unmatched ability to sustainably connect Africa’s natural beauty and vibrant destinations to the world. This in turn still stimulates more economic activities, as tourists spend their money with restaurants, hotels, retailers, tour operators, and other providers of consumer goods and services. In 2016, spending by foreign visitors who flew to African countries supported an estimated 4.9 million jobs and a US$35.9 billion contribution to GDP,” said Steele. 

He added that in total, accounting for the sector’s direct impact, its supply chain impact, its wage expenditure impact, and the impact of tourism made possible by air transport, the aviation sector supported an estimated 6.2 million jobs and a US$55.8 billion contribution to GDP in Africa in 2016.

“As the economy across much of the continent improves, governments in Africa must alter their historical view of aviation as a specialised or elite sector and begin to see it as a truly strategic asset,” he stated. 

Aviation remains the life-blood of the global economy and supports about 65.5 million jobs and US$2.7 trillion in GDP, which is 3.6 percent of global GDP. In 2018 the industry is expected to transport over 4 billion passengers, which means that on any given day, more than 12 million people are in the air. With over 120 000 flights all over the globe, the aviation industry carries US$18.8 billion worth of cargo every single day.

Closer to home, here in Africa, air transport supports 6.2 million jobs and 55.8 billion in African economic activities. That is 1.8 percent of all employment and 2.6 percent of all GDP in all African countries in 2016. Aviation directly employs over 415 000 persons in Africa and the continent accounts for 98 million passengers a year, 1,130,000 flights, 349 commercial airports, 161 airlines, 1277 aircraft in service, 36 air navigation services providers and 968 000 tons of freight.

Oxford Economics forecasts that by 2036, the impact of air transport and the tourism it facilitates in Africa will have grown to support 9.8 million jobs (60 percent more than in 2016) and a US$159 billion contribution to GDP (a 184 percent increase).

However, Steele was quick to point out that high taxes and charges, inadequate infrastructure, capacity and skills gaps, and, most notably, a lack of connectivity across the continent, have created a less than ideal growth environment.
“The reality is that the continent of Africa is still a very challenging place to do business. Adequate infrastructure, a competitive cost base, and facilitated travel are all still lacking in key countries. Here you can see the country ranking from last year’s World Economic Forum Travel & Tourism Competitiveness Report, and you can see that Southern African countries still have a way to go to improve their ease of doing business. Blocked funds are also an ongoing major issue in some countries for airlines – how can they invest in a better passenger experience if they cannot access the money from the ticket?” said Steele. 

2018-10-15  Edgar Brandt

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