Future new aircraft sales to Africa remain low says Boeing

AFRICA REMAINS FIRMLY ROOTED AT THE BOTTOM OF FUTURE AIRCRAFT SALES

(Posted 11th July 2014)

Boeing’s latest updated sales forecast for the period between 2014 and 2033 projects demand for single and twin aisle aircraft to reach 36.770, with the majority of those being narrow bodies.

Randy Tinseth, Vice President of Marketing, Boeing Commercial Airplanes said when releasing the latest market data: ‘With new and more efficient airplanes entering service, the growth in air travel is being driven by customers who want to fly where they want, when they want. Based on the overwhelming amount of orders and deliveries, we see the heart of the single-aisle market in the 160-seat range. There’s no question the market is converging to this size, where network flexibility and cost efficiency meet. The Next-Generation 737-800 and new 737 MAX 8 offer our customers the most revenue potential in this mid-sized space’.

Fueling this year’s forecast is according to the Boeing report the single-aisle market, which is projected to be the fastest growing and most dynamic segment due to the continued emergence of low-cost carriers. 25,680 new airplanes will be needed in this segment, making up 70 percent of the total units in the forecast. Boeing forecasts that 8,600 new airplanes will be needed in the twin-aisle segment, led by small widebody airplanes in the 200 to 300 seat range such as the 787-8 and 787-9 Dreamliner. This year’s forecast reflects a continued shift in demand from very large airplanes to efficient new twin-engine products such as the 787-10 and new 777X.

Region Airplane deliveries
Asia-Pacific 13,460
North America 7,550
Europe 7,450
Middle East 2,950
Latin America 2,950
Russia/C.I.S. 1,330
Africa 1,080
Total 36,770

While the Asia / Pacific region leads world demand by a substantial margin, and North America and Europe are nearly neck on neck in the forecasts, does Africa once again perform dismally. Africa is seen as the continent with the greatest growth potential for air traffic. With a global air transport market share of only 5 percent, this potential however does apparently not translate into significant growth vis a vis aircraft sales. Going by Boeing’s forecasts does the African continent come last with a projected demand of only 1.080 aircraft, raising the stark prospect that foreign carriers will continue to increase their market share at the expense of African airlines. This comes inspite of best efforts by Africa’s Big Four, namely Ethiopian Airlines, Egypt Air, South African Airways and Kenya Airways all of which are individually set to significantly boost their fleets but have, compared to the Gulf giants and European and American legacy carriers not enough critical mass to stem the tide.

Ongoing restrictive practices in regard of traffic rights by African governments, many of which have made little progress to implement the decades’ old Yamoussoukro Declaration or the various protocols of SADC, COMESA and the EAC vis a vis aviation integration, combined with hostile Visa requirements, are all playing their part to stunt the growth of African airlines. Tax assaults too, as seen in Kenya where parliament through their VAT Act has displayed a particularly negative if not outright hostile attitude against airlines, have impacted on the growth potential of African airlines, leaving both AFRAA and IATA often lost for words when lobbying governments and advocating for greater support for the aviation industry.

All this plays out in favour of the global big league carriers which continue to move aggressively into Africa. Led by the Gulf giants Emirates, Etihad and Qatar Airways, but also by the Gulf’s low cost carriers like Fly Dubai and Air Arabia has Turkish Airlines followed suit, rolling out new African destinations at a breathtaking pace. Most of them are wooing passengers with brand new airports (Dubai World Central, Doha’s Hamad International, Abu Dhabi’s Central Terminal and a new still under construction multi runway airport in Istanbul) while in Africa, apart from South Africa which made major investments in aviation infrastructure ahead of the FIFA World Cup in 2010, big capacity boosts are still many years away.

Boeing’ latest data, which come as no surprise to regular aviation observers, may yet provide a wake up call to governments when they realize that Africa, as far as aviation is concerned, is last in the rankings, and by common consensus largely because of the way how governments and their bureaucrats treat their airlines. If Africa is to rise, considering the number of people on the continent and its sheer size not entirely unreasonable to expect and hope for, it will take major revisions in government policies, laws and regulations to accomplish this.

The upcoming inaugural ICAO / UNWTO meeting in the Seychelles in October will provide a perfect platform to discuss measures, which will benefit both aviation and tourism sectors in Africa, set an agenda and formulate an immediate action plan so that in time to come, Africa will rise in global aviation rankings and prove that it indeed is the world’s last economic frontier with boundless opportunities.

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