AFRAA AGA 2016- key takeaways and opportunities
For those of you who were not fortunate enough to be in Victoria Falls for AFRAA's AGA this week, please allow me to share my key takeaways. The theme of the conference was "Managing the Survival and Market Recovery of African Airlines"
- Safety is the number one priority for African aviation, in fact it is number one for aviation as an industry and we all have a responsibility to keep operations as safe as possible. 2015 was the safest year ever and 2016 has seen no fatal accidents in Africa so the measures being taken (IOSA certification through IATA for example) are having an effect. There are 29 IOSA certified sub-Saharan carriers and airlines that are IOSA accredited are 3.5 times more safe than non IOSA airlines. Therefore, all airlines should strive to achieve this certification to ensure the safest possible operating conditions.
- Travel facilitation: 2016 saw the introduction of the pan-African passport at the AU summit in Kigali. This is due to implemented fully over the coming years, but there has been progress in visa facilitation with 13 African countries offering visa on arrival to African residents. Now the challenge is to reduce or eliminate the costs associated with visas and roll this out across the other 41 countries.
- Infrastructure: We have all read about the predicted growth trajectory for Africa, but the challenge is securing investment in the infrastruture that will have to accommodate this growth. This event took place in Victoria Falls and the new International Airport was inaugurated on Friday 18th November. Rwanda will break ground on a new airport in 2017, Uganda have announced an upgrade and Addis will also grow to cope with the current passenger throughput.
- Taxation/high costs: Fuel in Africa is 2.5 times the world average and passenger charges can be up to $150/pax vs the global average of $25.
- Currency Issues: Lack of Forex leading to blocked funds. 2016 has seen currency problems across countries that are heavily reliant on commodity revenues, for example Angola and Nigeria. This is due to the fact that the economies have opted to artificially maintain their currency's value and then have suffered severe immediate depreciation upon removing the peg.
- Peace on the continent. There is terrorist activity in some pockets of Africa, but the continent is at relative peace and this is conducive to a strong aviation market.
Opportunities for 2017 and beyond:
1. NDC (New Distribution Capability). Mr Raphael Kuuchi, VP Africa at IATA announced that to date, 26 airlines globally have implemented NDC but none of these are African. Find out more on IATA's website:
2. Fast travel. Using mobile boarding passes and self tagging.
3. Liberalisation. June 1st 2017 is the date set for open skies and 11 countries have commited to implementation. These countries represent 75% of Intra-African passengers and a combined population of 600 million.
2017 is 29 years since the Yamoussoukro decision was signed to open the skies in Africa, so to say this is long overdue is an understatement. Madame Iyabo Sosina, Secretary General of AFCAC (African Civil Aviation Commission) provided a strong message. 'If you are an airline sourcing protection, you will have no choice but to allow progress'
4. Oil prices. Global oil prices are predicted to remain low for the foreseeable future. If Africa can organise a method of making its supply more efficient and perhaps governments lower taxation to catalyse the industry, this lower cost can be delivered to the end user.
There were over 550 high level industry delegates in attendance. Many thanks AFRAA for the opportunity to participate.