Aviation Africa: Airline business – competition, reputation and opportunity
The first afternoon panel, moderated by Victoria Moores, bureau chief, Air Transport World and African Aerospace, looked at airline business in the region.
The panel comprised Vinu Abraham, head of sales, Africa and Middle East, ECAir, Congo; Captain Sandy Bayne, head of flight operations, South African Airways; Sanjeev Gadhia, CEO, Astral Aviation Ltd, Kenya (pictured); and Milco Rappuoli, sales director Middle East and North East Africa, ATR, France.
The session started with Sanjeev Gadhia who said that Astral Aviation's business was growing by 20 percent per year with cargo business coming from all corners of the globe.
“We are very optimistic about our cargo business and are setting up a new hub in Lagos,” he said. “Africa is a very large continent and you really need a number of hubs. We expect to have three in the next few years.
“We are also acquiring a fleet of four 737s, with two in Lagos and two in Johannesburg. There is also an opportunity for us to have two more."
Captain Sandy Bayne, head of flight operations, South African Airways, said that the airline had been through a period of turbulence.
“You may have a strategy, but you need to set tasks to make that strategy happen. Our previous CEO didn't do that, but our new acting CEO has a 90-day strategy and we are setting real tasks from that to ensure it happens.
“The overall business solution isn't as simple as privatisation versus government involvement. Once we are set up with the airline responsible for its business and government just responsible for governance we will be on our way.
“South African Airways is in a strong place. My task is to ensure that the implementation works. Going forward we have to look at how we can bring down our unit costs,” Bayne said. He added it had saved 110m Rand in fuel costs alone last year.
Bayne added that with a continent like Africa, where a large proportion of the population cannot afford to fly, many ask whether you really need African airlines?
“I argue that a local airline, efficiently run, creates jobs within a country. We need to generate the income at home. The only way you can do that is creating employment and uplifting the local population,” he said.
“My view is that only African airlines create growth within the continent.”
Another view from the panel was “who is better placed to understand Africa than an African airline itself?”.
Another common misconception is that there a single “Africa” and the rest of the world doesn't see it as a group of very separate entities.
Victoria Moores said that a single accident on the continent can affect the reputation of the whole.
On the question of whether a government should be involved in running an airline, Vinu Abraham, ECAir, said that it is not easy for a private company to come into some smaller African countries to start an airline.
“A government can facilitate the start-up of an airline, help define routes and get the enterprise up and running," he said.
Milco Rappuoli, ATR, then said that the Middle East and Africa has more links than you would think.
“There has been a learning process in the Middle East. Companies such as ours should help facilitate development between countries, in terms of training facilities.
“We have to help educate countries as to the best way forward. It is simply a matter of showing them what has worked elsewhere,” he concluded.
And could Africa do more to market itself, particularly with the recent concerns over Ebola and terrorism attacks?
Sanjeev Gadhia, CEO, Astral Aviation Ltd, Kenya, said that news of terrorist attacks has hit tourism badly in the region. “The government of Kenya has launched a campaign to show how safe tourist resorts actually are,” he said.
The overall view of the panel was that Africa is not a dangerous continent and suffers a lot of bad press, which is mostly unjustified.
Captain Sandy Bayne joked that perhaps travel advisories should be issued for people travelling to the United States!
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