Experts chart path for continent’s airlines’ growth *How taxes, high fuel cost, others affect carriers

Johannesburg

Experts in aviation from the globe converged in South Africa yesterday to proffer solutions to the challenges confronting Africa’s aviation sector and came up with a verdict that the sector needed urgent rescue from its woes.

They lamented that to get out of the woods, the continent need to improve on its air safety, need to have financially strong carrier, stressing that air transport is the key to unlock many opportunities.

They spoke yesterday at the 23^rd African Aviation MRO supplies and stakeholders conference tagged, “MRO Africa”, which centres on airline maintenance, repairs and overhaul (MRO) in Africa.

In attendance were of South Africa’s Minister of Transport, Dipou Peters, former Secretary General, African Airlines Association (AFRAA), Nick Fadugba, Chief Executive Officer of South African Airways, Monwabisi Kalawe, Chairnan, Airline Operators of Nigeria (AON), Capt Noggie Meggison, representatives of airplane makers, Boeing, Airbus, Bombardier, global airline chiefs among other dignitaries.

Kalawe listed fuel, personnel and multiple taxes as factors that have done incalculable damage to many carriers in the continent, adding that these airlines find it extremely difficult to compete with foreign carriers which have younger aircraft fleet of less than five years and enormous resources to edge out African airlines on many of the routes they ply.

The participants disclosed that rising jet fuel prices are increasingly affecting profit margins of African airlines, while some airports lack modern and adequate handling facilities to meet standards to handle passenger and cargo aircraft, while African governments are suffocating the airlines with big taxes.

Airlines global body, the International Air Transport Association (IATA) had also voiced concern over the high tax regime affecting the airline industry and said it hampered air travel demand and at times violated international conventions.

Higher taxes dampen travel demand and that is bad for the airlines and more importantly for the continent’s local economy.

High taxes on the jet fuel, which goes up as high as 40 percent in some states, coupled with higher airport charges in the form of user development and airport development fee, which have cascading effect on the air fares, have had a negative impact on the domestic passenger demand in India.

The government's recent move to handover six airports including Chennai and Kolkata to private players for operation and management is being opposed by the national airports unions on the ground that the decision will lead to higher airport charges for the passengers.

Kalawe further stated that airline operators are affected by increasing fuel prices and higher taxes imposed by the government, adding that aircraft operators in the region are badly hurt by rising jet fuel, which almost doubled in the past year, forcing some aircraft to fly to neighboring Kenya for re-fueling at prices 30 percent lower than in Tanzania.

He however stated that the only way out of the situation was for carriers in the continent to go into partnership, engage in fleet renewal, upgrade of infrastructure and governments’ ambition to have national carriers that would be well funded.

Speaking in the same vein, Fadugba regretted that the carriers are still far away from competing with the likes of British Airways, Emirates, hinting that Emirates annual revenue of about $15 billion far exceeds that of South African Airways, Kenya Airways put together which he said is about $7 billion.

His words, ‘’you can see the mis-match and how they out number our airlines with huge number of frequencies they do to Africa. Emirates does eight frequencies daily to South Africa with wide-body aircraft. If you get to Dubai, there are over a hundred wide body airplanes in the airport, far more than what three airlines in Africa have. It is essential that African airlines come together to increase their chances of financial success’’.