Western and Middle Eastern airlines are planning a pronounced push into Africa, adding routes and boosting passenger capacity to take advantage of a region where air traffic is set to grow strongly.
Air France, Germany’s Lufthansa and Dubai-based Emirates have lately made no secret of their increased interest in the continent.
“Passenger volume on the continent should increase 6% a year between now and 2025, opening some very promising prospects for Lufthansa,” a company spokesperson said.
Air links between Asia and Africa in particular are likely to grow significantly.
Chinese investors are building roads and rail lines throughout Africa in exchange for oil, wood and other natural resources, a trend that is now becoming evident among Indian industrialists.
Added to a pick-up in commercial ties is an Asian population that is growing steadily in Africa — an estimated one million Chinese are now living there.
As a result, Asian-African air traffic should expand by 9% a year over the next decade, according to the the Financial Times.
At the same time, a weakening in French influence in Africa has opened the African commercial air travel sector to increased competition, according to Jean-Luc Grillet, chief executive at Emirates France.
“There is a certain logic in the near-term for Emirates to develop its network in Africa,” he said.
“The best way to get to Africa from Asia — and vice versa — is through Dubai” rather than a European capital.
Richard Aboulafia, an analyst with the Teal Group, said “the three big Mideast airlines are well positioned to go after [the African] market [which] … offers very respectable growth rates.
“The Mideast airlines enjoy two large advantages — government support and geography.”
At Oddo Securities, analyst Yan Derocles noted that as Africa appears to be coping better with recent economic slowdowns, profitability per passenger “is much higher than that in other regions thanks to weak competition”.
He said that in normal years, in the absence of major disruptions, operating margins are above 15% for an airline in Africa while for the industry at large they run at between 3% and 5%.
“We also know that Air France is enjoying margins of more than 70% on one or two routes in Africa,” Derocles said.
Rival Lufthansa in conjunction with Swiss, Austrian Airlines, BMI and Brussels Airlines, serves 38 destinations in Africa with 265 flights a week — and more are planned.
“The economically dynamic regions of west and central Africa constitute a development priority for the Lufthansa network,” the company spokesperson said.
In 2009 alone, Lufthansa increased its Nigerian capacity by 40%.
No longer shielded from competition, Air France-KLM is responding with a fresh campaign in Africa, dubbed Leopard, according to the French financial paper Les Echos.
The company at the moment operates 490 flights a week to 48 destinations in Africa. – AFP