AFRAA 44th Annual General Assembly concludes with a call for greater intra-Africa cooperation to boost growth
Leaders of the African Airlines Association (AFRAA) concluded their 44th Annual General Assembly (AGA) at the Sandton Convention Centre in Johannesburg, South Africa on 20th November 2012, with a call for airlines cooperation, market liberalization and creating of a level playing field to facilitate competition and sustainable growth. The three-day conference was held under the theme "Business together in the era of growing opportunities" and brought together over 400 high profile delegates from Africa and across the world.
The well organized and colourful event was officially opened by the Minister for Public Enterprises of South Africa, Hon. Malusi Gigaba, who challenged African airlines to be more aggressive and innovative in the business and work together to better serve the continent air transport needs. He tasked airlines in Africa to work together and seek partnerships to broaden their network and compete with operators from other regions.
The President of AFRAA and Chairperson of South African Airways, Vuyisile Kona, noted that air transport liberalisation is good for the continent although it can pose serious survival challenges to local airlines that are ill-prepared to compete in a liberalized market. He pledged the willingness of South African Airways to support other African airlines in areas where it has expertise. He commended the large turnout at the AGA and reiterated the need for airlines to commit to working together through commercial cooperation and joint initiatives to derive economies of scale. In his words, "this is the only way we can be competitive and profitable".
2011 Performance of African Airlines
Delivering the state of the industry report to the Assembly, the Secretary General of AFRAA, Dr. Elijah Chingosho, highlighted the enormous growing business opportunities on the continent that are stimulating air transport development. He noted that, "Outside of North Africa, economic activity was buoyant with an average growth rate of 4.5% in 2011 reinforcing the recovery of 4.8% in 2010," adding that "growth is expected to recover to 5.1% in 2012 and 5.2%, the year after."
On the performance of the airline industry, Dr. Chingosho said African airlines have attained an average annual traffic growth of 8.75% in the last 8 years except 2011. He identified the challenges posed by the euro zone crisis, the Arab Spring in North Africa and political instability in parts of Africa, as some of the reasons for the 8.2% decline in passenger numbers in 2011 to 56 million. The report noted that 42% of all passengers flew on intercontinental routes, 26% within Africa while 32% were domestic passengers.
On freight, the report noted that African airlines still lack the capacity and are not properly structured to take advantage of this business segment currently dominated by non-African airlines. According to AFRAA, airlines continue to lose freight business on intra-Africa and domestic routes to road, water and rail transport systems. Of the 705,000 tonnes of freight carried in 2011, 68% was to/from intercontinental destinations, 23% to intra-Africa routes and 9% on domestic networks.
The report noted that though Europe remains the biggest intercontinental traffic route (56%), Asia Pacific is the region to watch going forward as it is the fastest growing market for African operators with less competition. He deplored the declining market share of African airlines on intercontinental routes saying that, "In the last decade, African airlines lost 10% capacity to non-African operators. The only way to arrest such rapid decline is for airlines to work together and support each other and States to create the conducive environment for airlines to compete on a level playing field," Dr. Chingosho noted.
Challenges of the Industry
Safety, high and unpredictable oil prices, lack of market access, taxes and charges and failure to cooperate among airlines were identified as some of the key challenges confronting African airlines. The Secretary General charged African States to take their safety responsibility seriously and through the African Union, engage the EU on the banning of many African airlines from operating into EU airspace. He was blunt in stating that "The EU list of banned airlines is a ploy to make African operators in the eyes of passengers look unsafe and thereby divert traffic to European competitors." Dr. Chingosho queried why the EU claims some African airports and facilities are unsafe, yet the EU carriers continue to operate and conduct brisk business out of those unsafe markets.
On safety, the report noted that significant improvements have been made over the years with 38 African airlines currently registered on the IOSA registry. The 44th Assembly urged States to take their safety oversight responsibility seriously and called on countries with challenges in meeting their safety obligations to seek assistance through the AFCAC/ICAO initiated AFI Plan for safety programme.
African airlines took a swipe at the EU list of banned airlines and called upon the European Union to adopt pragmatic and constructive approaches to dealing with safety in the industry. They upheld ICAO as the only neutral body with a mandate to oversee to global regulation of aviation and urged the EU to avoid unilateral regulation of air transport which will likely ignite retaliation.
The Assembly called upon governments to demonstrate commitment towards liberalizing the air transport industry and reducing taxes and charges to make air travel more affordable for the majority of the people. This will stimulate regional and domestic traffic growth and speed up regional integration and intra-Africa trade. African governments were also called upon to remove barriers to cooperation between carriers and put in place policy and regulatory framework that facilitate beneficial cooperation.
Appointment of Officers
The 44th AGA elected Dr. Pimentel, the Chairman and CEO of TAAG Angola Airlines as Chairman of the Executive Committee while Mr. Inati Ntshanga, CEO of South African Express and Mr. Sergio Rosa CEO of Air Burkina were re-elected First and Second Vice Chairmen respectively of the Executive Committee. The AFRAA Executive Committee has oversight responsibility for the Association and crafts policy as well as oversees implementation of projects and programmes by the Secretariat.
The Assembly also elected three new members to replace those whose term of office on the Executive Committee expired at the close of the 44th AGA. They are: Mrs. Fatima Beyina-Moussa, CEO of EcAir; Eng. Enhemed Elwani, Chairman and Ag. CEO Afriqiyah Airways and Mr. John Mirenge, CEO of RwandAir. They will serve a term of 3 years each.
Host of 45th AGA
Kenya Airways was elected by the Assembly as host of the 2013 AFRAA AGA. The Assembly announced that the 45th AGA will be held in a yet to be named venue in Kenya from 24-26th November 2013.
A former Chairman of EgyptAir Group and AFRAA, Eng. Hussein Massoud, was recognized at the AGA for his distinguished contribution to AFRAA and the African aviation industry. Eng. Massoud, who is also the immediate former Minister of Aviation of Egypt, received a plaque of recognition from the Minister of Public Enterprises of South Africa, Hon. Malusi Gigaba.
Presentations and reports are available through the link: http://www.afraa.org/index.php/our-work/agas/44th-aga-2012
Event photos available on our facebook page: https://www.facebook.com/AFRAA.AfricanAirlinesAssociation/photos_stream