SURVEY Industry forecast
global economy recovers and the outlook improves for oil producers such as Nigeria and Angola. The United Nations Economic
Commission for Africa (UNECA) says that African countries have achieved continuous positive real growth rates since 2000, even in the face of the financial and economic problems that hit the world economy. The Standard Chartered Bank predicts that Nigeria will be home to Africa’s biggest economy by 2018, overtaking South Africa. A forecast published by the World
Bank at the end of October 2011 predicted that the South African economy, the biggest on the continent, would probably show an expansion of 4.1 percent in 2012 as the government steps up spending on infrastructure projects and consumer spending rebounds. The economy of Angola, Sub-
Saharan Africa’s second-largest oil producer, will expand by 7.5 percent in 2012; and Ghana, which began exporting oil for the first time in 2011, will have the fastest growth on the continent at 10 percent in 2012, the World Bank said. One third of the construction projects
Tyler
“Government policies need to recognise aviation’s vital contribution to the health of the economy”
currently under way in Africa are Chinese run and the Asian superpower covets access to the continent’s burgeoning energy supplies. The outlook in Kenya, East Africa’s
biggest economy, “remains favorable”, with growth of 5.5 percent in 2012 as it continues to benefit from rising trade with the rest of the region. But drought could damage agricultural output, derailing the growth outlook and damaging the vibrant northbound trade in the air freight of perishable goods to eager consumer markets in Europe. This type of scenario would also badly hurt the foreign currency-earning potential of many African countries. “Africa used to rely on river and road
transport, but today aviation is essential for development, and will increasingly become the 21st century’s answer to
18 AIR LOGISTICS MANAGEMENT
connect people in the region with each other and the rest of the world,” says Andrew Gordon, Airbus director strategic marketing and analysis.
IATA sees flat growth In early December the International Air Transport Association (IATA) announced revisions to its industry outlook. For 2011, final figures are expected to show that profitability has remained weak but unchanged at US$6.9 billion, but looking ahead to 2012, IATA downgraded its central forecast for airline profits for the year from $4.9 billion to $3.5 billion. IATA, which represents some 240
projects currently under way in Africa are
One third of the construction
Chinese run
airlines accounting for 84 percent of global air traffic, now expects air cargo to show flat growth and yield this year instead of a previously forecast expansion of 4.2 percent and that any revenue increase will be offset by rising operational costs. Tony Tyler, IATA director general and CEO, observes: “The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the Eurozone
sovereign debt crisis. Such an outcome could lead to losses of over $8 billion – the largest since the 2008 financial crisis.” But IATA believes that even if government intervention averts a banking crisis, it is unlikely that Europe will avoid a brief recession. At the IATA Annual Global Media Day
in December, Tyler sounded a warning bell: “This admittedly worst-case … scenario should serve as a wake-up call to governments around the world. In a good year, the airline industry does not cover its cost of capital, much less in a bad one.” He emphasised: “In a bad year, aviation’s ability to deliver connectivity and keep the heart of the global economy pumping becomes even more vital to initiating a recovery. Government policies need to recognise aviation’s vital contribution to the health of the economy.”
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