Picture credit: stock.adobe.com/Vadim
Africa’s aviation market is approaching pre-covid levels with some key regions already moving beyond this. But this growth is only the beginning. 
The continent is benefiting from a growth in the flying class, and policies of continental integration. On the other hand, there are many structural issues that are limiting ground-based transportation systems.
These factors lay the foundation for a rapidly growing air transport sector on the continent. This potential however creates challenges for the ground handling sector.
Ground Handling stakeholders need to balance current operational challenges, with an uncertain market outlook that requires a focus on resilience, while developing the capacity to support the industry to realise its growth potential.
The African aviation sector has seen a great recovery during 2023. In terms of revenue passenger kilometres (RPKs) last year the growth was 87.1% and it is now only 9.4% below its pre-covid level.
It is also notable that some key economies on the continent such as Nigeria, Ethiopia and Egypt have even exceeded their 2019 levels for both airline capacity and passenger demand.
Southern Africa, despite also witnessing large year-on-year growth remains below pre-covid levels for both measures. South Africa the largest economy in the sub-region is a great example of this; here passenger numbers are still 12% below 2019 while available seats are even lower at 27% below pre-covid levels.
This return to pre-covid levels must however be seen as only the beginning. Africa has the least developed aviation sector with the least available seat kilometres (ASKs) in any global region. It also has a large growth potential that is waiting to be realised.
A major driver for this potential, is the growth of the travelling class – the urban middle class that can afford to go on holidays, and travels for business purposes.
The African aviation sector has seen a great recovery during 2023
Currently 1.43 billion people call Africa home, this makes it the second most populous continent after Asia. But Africa has the fastest growing population of any continent, and while many other regions are struggling with an aging population Africa has a median age of 18.8.
Over the last 50 years the share of this population living in urban areas has doubled and by 2030 approximately 50% of Africans are expected to live in urban settings. Most remarkably is however the growth of the middle class.
Since the 1980s the average annual African middle-class growth of 3.1% has outstripped the population growth of 2.6% – as such by 2060, the middle-class is forecast to be 42% of the population. Considering this it is not surprising that Africa will produce some major economies by the middle of the century – both Egypt and Nigeria are expected to be in the top 15 economies by then, 25 years later both economies will be bigger than the UK, Germany, or Japan.
There are also structural issues on the continent that support a potential rapid growth for the aviation sector. The vast distances (Africa is the second largest continent after Asia) coupled by poor surface-based transport infrastructure and inefficient border posts, make road and/or rail travel unnecessary long and impractical. Further there are still many countries that are plagued with armed conflict, high crime rates, terrorism and/or kidnapping activities that makes surface travel between some regions virtually impossible.
While much of the world is shifting away from globalisation and integration and we are seeing many signals pointing towards a more fragmented world in the future, Africa stands out as a region where continental integration is on top of the agenda – which is another major factor that can benefit aviation on the continent.
This integration is driven by the long-term aspirations of the African Union Agenda 2063, which aims to create a prosperous and unified continent. The African Continental Free Trade Area (AfCFTA), which came into effect in 2021, is a major recent milestone in this integration journey, that can drastically increase continental economic growth and with that a need for travel.
But free trade – at least in the short and mid-term – on the continent is difficult to achieve considering the structural challenges considered above without relying on the aviation sector.
Government regulation and red tape plays a huge roll in the ground operations space
But interregional airline connectivity on the continent also remains limited.
A such it can be argued that the full implementation of the single African air transport market (SAATM) needs to be prioritised and expedited for AfCFTA to be a success. Further airlines will need to make a conscious effort to prioritise African route development. Unfortunately demand on many continental routes is low.
As such until economies grow and SAATM is fully implemented, a business model – not unlike the Ethiopian Airlines business model – of multisector flights relying on negotiated fifth freedom rights within Africa is the best hope for the development of profitable airline networks that span the continent.
But there are also other, more operational challenges. High costs and different standards, with often poor quality and safety records make operations on the continent difficult. This is the case for both airlines and players within the ground operations space.
The African ground operations sector is plagued by a general lack of resources. There is often too little ground service equipment (GSE), this is often also old and not used efficiently. Many airports also have insufficient staff which becomes especially problematic at smaller airports during their operational peaks.
Airports are often old with insufficient space to accommodate several ground handlers and their equipment. Where new airports exist, these sometimes quickly fall into disrepair due to lack of adequate maintenance. Elsewhere, modern facilities are not used efficiently, and unnecessary manual processes are implemented that often don’t meet international safety and security requirements. Many airports also experience technology issue such as electricity outages or poor internet connectivity. As such, digitalisation and automation remain distant dreams in too many locations.
State protectionism is another feature of aviation in Africa. Government regulation and red tape plays a huge roll in the ground operations space. Often there are local monopolies, and sometimes operating licences are only issued for relatively short time frames, which limits competition and drives up cost.
Beyond this, political interference in general is often witnessed in many countries. In some cases, ground handlers need to have a relationship with local, regional, or even national political representatives to operate effectively. Often this leads to unfair competition where companies are given contracts based on personal relationships, and sometimes even outright corruption.
There are also management and leadership issues within many companies operating on the continent. Many managers are not sufficiently skilled. Those that are, often seek better opportunities outside of Africa, primarily in the Middle East where there is a large demand for African aviation professionals. This leads to consistent licencing and qualification challenges.
Unfortunately, Africa is also affected by a general de-prioritisation by global companies. GSE manufactures take longer to deliver to Africa and often charge higher prices. International airlines on the other hand are quite demanding, they often want to pay less and in more recent times also demand more modern environmentally sustainable GSE.
All of this leads to relatively high handling costs, which are further compounded by some of the highest airport taxes in the world. Perhaps not surprisingly, the most monopolistic handlers also tend to have the highest charges and poorest service quality.
But there are some positive signals in many locations that are beginning to address these problems. Large investments into airport infrastructure and new facilities are happening in countries across the continent from Ethiopia to Tanzania, Rwanda, Uganda, Ghana, Angola, and others.
Growing international tourism demand in some airport is also leading to additional revenues and a few are using this to invest into technology and automation. Further, there is an abundant young labour force available in most parts of the continents that due to the cultural diversity they grew up in, have a natural diversity skill that is a great foundation for handling diverse customers and their needs. Virtual internationally accepted trainings will make it easier to upskill this growing labour force.
There is also increasing support for the African ground handling sector from international organisations and financing institutions. Additionally, many large international ground handling companies operate across the continent, and there are opportunities in collaboration with local partners.
This can be beneficial for both parties and helps to build know-how, within the African labour force. To address both limited airports space and high cost of GSE, equipment pooling is also increasingly seen as a viable option.
But to realise Africa’s full growth potential this is not yet enough. If the challenges listed above are not addressed efficiently across the board, there is a risk that growth will lead to a deterioration of ground services quality on the continent. A such businesses will need to shift from constantly trying to catch up to becoming truly proactive.
This requires them to consistently develop and update their business plans and strategies, to proactively invest into skills development and attracting young talent to the industry (this will come at a cost), and to become faster at addressing little issues before they spiral out of control. Airports need to focus on upkeeping their basic infrastructure. Airports further need to be developed, properly maintained, and used as intended. Finally, government focus should shift to provide a fair playing field for private competitors and to prevent corruption.
During covid-19, the African ground handling sector came close to collapse, but is now close to a full recovery in most parts of the continent. Economic recovery however differs greatly across the continent and the risk of a global recession still looms - there are also potential black swan events that could lead to sudden collapses in the industry.
As such the sector needs to proceed with caution and remain resilient while overcoming current challenges and preparing for the continents growth potential.
Africa is resilient by nature. The continent has dealt with many problems in the past and is continuing to do so. Businesses across the continent have also learnt from the pandemic and have become even more agile and resilient. However, Africa tends to follow the developed world – even more so during times of crisis.
It is in the continent’s interest to move away from this, to build its own skills-base and passion for itself so that it can create better solutions for its own problems. Doing this will play a major role in leveraging the entire aviation eco-system to work towards achieving its enormous growth potential.
