MIDDLE EAST & AFRICA: ACI


‘Paradigm shift’ in non-aero thinking spells positive signs for retailers in Africa


Despite accounting for roughly 32% of total non-aeronautical revenue, retail concessions are of growing importance at Africa’s airports as operators are slowly viewing extra-aviation income as a source of higher profit margins. Luke Barras-Hill reports.


E


ncouraging signs can be seen in Africa’s air transport market in 2019, with international pax


growth of +8.3% in the first half of the year driving most of the total 7.1% increase in traffic, according to data from ACI World. Yet Africa’s air transport market


still accounts for a mere 2.1% share (92 million pax) of the 4.4 billion passengers flying worldwide last year, indicates IATA’s World Air Transport Statistics (2019 WATS). For most of the continent’s circa


1.2 billion inhabitants, air travel remains largely out of reach due to a multitude of factors that historically have included income depression, inflation, currency weakness, oil price volatility, inadequate intra- connectivity and access – chiefly high-ticket fares. With almost 9% of total seat


capacity, Ethiopian Airlines has carved out a market-leading position and is more than 50% larger that EgyptAir, Royal Air Maroc and South African Airways, according to an African Aviation Outlook 2019 analysis from market intelligence provider CAPA released earlier this year.


LCC’s ‘limited opportunity’ However, foreign airlines such as British Airways, Emirates and Air France retain a competitive advantage. LCCs accounted for only 12% of seat capacity last year, according to CAPA and OAG data, which says the LCC penetration rate to/from Africa is marginally higher at 16%, but still modest compared to the global average and consists almost entirely of connecting services between Europe and North Africa. Notwithstanding this,


the


LCC penetration rate has grown ‘significantly’ over the last 10 years, albeit from a very small base. Outside


OCTOBER 2019


largest player Ryanair, intra-African LCC operations are ‘difficult to sustain’, add the partners. “As it stands, foreign carriers


continue to dominate the African market and have a significant competitive advantage due to their scale,” Ali Tounsi, Director General, ACI Africa tells TRBusiness. “The prospect of new-entrant


low-cost carriers in Africa remains limited in the near term, but the African Union launched the Single African Air Transport Market in 2018. This will further improve the region’s aviation prospects through the adoption of a common regulatory framework, which should increase local connectivity.” The prospect of more direct


connectivity should also be helped by a liberalisation in visa regimes in the past 10 years or so. “Globally, between 2008 and 2018,


a shift has taken place from traditional visas (where a traveller must apply in person at an embassy) to visa-on-arrival, electronic, or e-visa and the removal of visas altogether,” observes Tounsi. “However, Central Africa and


North Africa remain two of the most restrictive regions in the world, where outdated visa policies remain


an obstacle to both tourism and economic growth. There remains an urgent need to move away from paper visas towards e-visas and multilateral agreements to facilitate travel and strengthen security while removing barriers to growth and job creation.”


DF sales at $816m Investment in infrastructure to lift capacity remains a global challenge for airports and the aviation market in general, not least of all in Africa. However, things are changing. “The wave of privatisation that


we are increasingly seeing has translated into higher non- aeronautical revenue spending in many cases,” continues Tounsi.


“It is encouraging to note that new passenger terminal infrastructure being set up in Africa recently [allows for] significant duty free and travel retail areas.”


Ali Tounsi, Secretary General, ACI Africa


Above: Kotoka International Airport in Ghana.


TRBUSINESS 57


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