AFRICAN
ANALYSIS High
aspirations
Alwyn Brice takes a look at the African
continent, a land of promise – and dreams.
As ever, it is IATA who
has the most recent
data on Africa.
Its October snapshot
revealed that African carriers
had actually posted the
fastest growth of any region
in August 2019: an increase
in demand compared to the
same period a year earlier was
recorded. This continues the
upward trend in FTKs that has
been evident since mid-2018;
in fact, data showed FTKs
of 8% whereas every other
geographical region surveyed
turned in negative figures or
zero at best. More interestingly,
perhaps, it made Africa the
strongest performer for the
sixth consecutive month,
with capacity having swelled,
growing 17.1% year-on-year.
Moreover, strong trade and
investment links with Asia
have assisted a double-digit
increase in air freight volumes
between the two regions over
the past year. Indeed, despite
the ongoing US trade war,
China recently confirmed a
further US$60bn investment
in this vast continent.
Fast growth is all well and
good – but is the infrastructure
keeping pace? And what
about that old chestnut, the
open skies initiative? Much
has been written about the
need for harmony between
all the African states in terms
of aviation regulation so that
inter-country trade is fostered.
That’s the ongoing plan – but is
it merely a pipedream?
A year back, out of those
54 (or 55) states, just over 20
had signed up to the Single
African Air Transport Market
(SAATM) programme. By this
summer, that figure stood at 28:
latecomers to the party have
included Ethiopia, Nigeria and
Kenya. The signs are propitious,
yet advances remain painfully
slow. Last year, South African
Airways’ Acting General
Manager, Justice Luthuli, told
ALI that there was an urgent need to make progress and implement
Open Skies policies and agreements.
He was not alone in that request.
A problematical period for SAA
This year, ALI was unable to secure a direct comment from South
African Airways, since the airline was embroiled in strike action in
November over wage demands. Analysts have commented on this
latest development as yet another nail in the carrier’s coffin: SAA has
incurred cumulative losses of around R28bn over the past 13 years,
and has not actually posted a profit in 11 of those years.
The strike action in November was thought to have cost the
airline around R50m a day; this downward slide in the company’s
fortunes was actually flagged up in an Ernst & Young report four
years back, which suggested that over half of the carrier’s existing
contracts were either poorly managed or improperly negotiated.
Consequently, South African Airways has been trying to
renegotiate favourable terms on contracts with its suppliers, while
looking at sourcing better terms on new procurement spend,
including fuelling and handling provision, which could save it
nearly R2bn. As ALI went to press, though, the scenario was gloomy.
Labour woes
Meanwhile in Nairobi, Siginon Global Logistics has experienced
a different set of challenges. The company’s Operations Manager,
Winstone Akweyu, takes up the story.
“The key problems about doing business in Africa include
tapping into experienced or skilled labour. This has led to companies
employing expatriates as a solution, which comes with the
www.airlogisticsinternational.com December 2019 15
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