To rid the African air transport industry of the effects of the COVID-19 pandemic, carriers on the continent need to explore measures that would address partnerships and limited airline consolidation, a study by the African Airlines Association, Lufthansa Consulting and Kenya Airways has shown.
The study, which was a fall out of a recent forum among carriers on the continent and the global aviation and management consulting firm further show that the pandemic has thrown up fresh challenges for the air transport industry requiring new approaches of doing business in the face of increasing concerns on the sustainability of African Airlines.
Affirming that air transport plays a fundamental role in Africa’s socio-economic development as a catalyst for promoting tourism, fostering trade and regional development , the study indicates that the continent contributes less than three per cent of global air traffic in the last 15 years with the lowest level of market consolidation compared to the other regions in the globe.
The study show that AFRAA needs to provide leadership in pushing the frontiers of engagement that would facilitate discussions on the challenges and benefits of consolidation and measures for action by industry stakeholders to address the situation.
Confirming the impact of the study, AFRAA’s Secretary-General, Mr. Abdérahmane Berthe said carriers on the continent need to devise new approaches to doing business in the face of increasing concerns on sustainability.
“A crucial element in the success of the African airlines is consolidation and collaboration. The engagement of states, airlines and all the relevant stakeholders is necessary to effectively achieve the required outcomes on airline consolidation in Africa, “ he said.
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Aligning with his position with the study, Chief Executive Officer, Kenya Airways, Allan Kilavuka described consolidation and collaboration among African carriers as essential ingredients for resilience and sustainable business operations of airlines.
Kilavuka said: “It is crucial to retrace and learn from the footprints of consolidation from different parts of the world as we reset Africa’s aviation towards our collective dream for flying to a better future.”
fore we must elevate the tenor of discourse and make the airline industry matter in and for Africa.”
Head of Market Africa, Lufthansa Consulting, Ms. Catron Drawer said the COVID 19 pandemic has triggered fresh challenges requiring new approaches to drive the growth of air transport in Africa.
Drawer stated: “To meet the challenges of the “New Normal” requires a reset in our thinking and approach. We require new business models, meaningful innovations in operations, adaptive management open to change, and a growing true synergistic relationship between airlines and other relevant stakeholders.
“There is need for consideration of various models of consolidation including equity partnerships between two airlines or across a group of investments, cooperation between two or more well-matched airlines, or the formation of a new common airline.
“There should be the implementation of appropriate corporate governance structures necessary for consolidation. There is a need for Development Finance Institutions (DFIs) to finance the feasibility study of consolidation models. There must be uniform implementation of harmonised regulations and the establishment of an enabling working relationship between regulators, airlines and Regional Economic Communities (RECs).”