With a landmass of over 30 million square kilometers, and over 1 billion people, sadly, the African continent still falls short in the global air service market, with less than 1 percent share.
According to a recent World Bank report, “Africa has less than 1 percent of the global air service market despite having more than 12 percent of the world population”.
The report implies that Africa’s 12 percent share of world population is serviced by only 3.9 percent of all scheduled air service seats in the world, resulting in little or no air connectivity, high airfares, cargo movement and especially impeding ease of investment flow and ushering poor economic development across the continent.
The short fall also results in the loss of over $5 billion annually from investments that could not take off, or collapsed due to poor connectivity and lack of efficient transportation infrastructure. Meanwhile, while there were 1,088 routes flown within Africa in 1994, the figure had gone to 719 in May 2013 and is further going down, despite increasing demand for air transportation in Africa.
Speaking on the issue, Femi Adefowope, head, HRG & GSA for Delta Airlines in Nigeria, noted that with the fastest growing global population in the world, a swelling middle class in nearly every country, thus driving unprecedented levels of demand and production, Africa has potential for a viable aviation industry with good returns on investment.
Comparing the viability of aviation business in other climes, Adefope said by contrast, the population of North America and Europe combined, which is roughly equal to that of Africa, has access to approximately 54.6 percent of global aviation seat capacity, due sustained investments in the sector over there, despite their peculiar challenges.
He therefore, urged African investors and their foreign partners to shun the prejudice against doing business on the continent and invest as experience and empirical facts have consistently shown that return on investment (ROI) is significantly higher in those countries that present higher barriers or impediments/constraints to easy business transactions.
“In other words, hard-nosed and serious minded investors who stick it out, in spite of the daunting difficulties/ challenges in the African environment, usually “smile to the banks”. Examples include Coca Cola, MTN and Delta Air Lines among others”, he said.
On the impact on indigenous businesses across the continent, Kwabena Adjei, group chairman, Kasapreko Company Limited, makers of the popular Alomo Bitters, noted that most African entrepreneurs often cannot grow their businesses beyond their own country because of the poor air connectivity and transportation.
Adjei noted that better and easy air connectivity would enable his company to expand its distributors beyond Nigeria, Burkina-Faso, Cote d’Ivoire, Togo and Liberia to other African countries and overseas, where air cargo could speed up distribution.
However, to woo huge investments in the African aviation industry, Adjei observed that issues impeding ease of doing business across the continent, such as high tariffs/tax, stringent travel/visa, work permit requirements, applicable laws and statutes, business barriers, among others should be addressed and backed by enabling laws.
Culled from: http://businessdayonline.com/2015/09/africa-fills-less-than-1-of-global-air-service-market/