Business Hilights

Tracking Nigeria's Headline Business News Online

Sirika NAir

African airlines may lose out in AfCFTA logistics segment to foreign airlines if…

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The observed slow growth of African airlines accounting for only 92 million out of the 4.4 billion air passenger traffic recorded globally in 2018, has been seen by industry experts as a serious danger signal that continental carriers may be outsmarted by mega international airlines on full takeoff of AfCFTA.

Deductions from the latest International Air Transport Association’s (IATA) performance figures for 2018, released Wednesday showed that even though many of the international airlines operated by Europe, Middle East, Asian Tigers and Americas had been quiet, they may cash in by growing their activities in Africa so as to lead in the cargo handling segments of the continental free trade.

Analysts say with a paltry 92 million or 2.1 per cent of the global aviation market out of the IATA World Air Transport Statistics 2019 (WATS), foreign airlines will definitely dominate AfCFTA on air services.

The major reason frustrating intra-African aviation businesses include veiled restrictions tactically imposed by some governments against carriers from sister economies.

Observers say the inability of the African Union (AU) to prevail on countries to create level playing grounds for fellow African carriers to enjoy intra-regional Bilateral Air Services Agreement (BASA).

Business Hilights recalls series of horrible experiences so far recorded by leading Nigerian domestic carrier, Air Peace Airlines even in sister West African states.

Apart from hostile operating environments for African airlines across AU state another challenge that may weaken continental airlines to drive the expected traffic on takeoff of AfCFTA is the issue of infrastructure and capacities.

Currently, analysts say only carriers like South Africa Airlines, Egypt Air, Air Maroc, Kenyan Airways, Ethiopian Airlines and Rwandan Air can raise their game based on their installed capacities due to investments in the last couple of years in the industry.

Analysts also averred that on sea cargoes, only seaports in economies like Egypt, South Africa, and Morocco can drive AfCFTA based on their expanded installed capacities.

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