COMMERCIAL AIRCRAFT FINANCE ENTITY
for Africa and the Indian Ocean
At present, non-African airlines’ market share of all African intercontinental traffic is 78%. Alone, the three daily A380 services to/from Johannesburg provided by non-African airlines will account for US$730 million a year in round-trip fares that will not circulate in Africa. Yet African revenue-generating traffic is expected to almost triple between now and 2030. And it is predicted that almost half of the 20 fastest growing traffic flows in the world over the next 20 years will be to/from/in Africa.
For a variety of reasons, Africa’s attempts to implement ‘open skies’, partly to facilitate the growth of airlines with sufficient economies-of-scale to compete internationally, have met with only mixed success: hence the larger airlines are not as large as they might be and the weaker airlines merely subsist, remaining a drain on valuable resources. One consequence is that, as of 2009, the continent’s jet fleet average age was 19.8 years (a jet aircraft coming off the production line today is around 80% more fuel efficient per passenger seat kilometre than one delivered in the 1960s). And export credit, one of African airlines’ most dependable sources of financing for new aircraft purchases, has just become more expensive as a result of revised OECD rules effective February 2011. In the absence of an over-arching strategy to modernise the African commercial aircraft fleet, most of the benefit of Africa’s air traffic growth will accrue to non-African carriers.
