Why flying in Africa is getting harder even as airlines expand fleets

Running an airline in Africa is not an easy task, at least not any more.

Passengers are demanding top-of-the-range safety and service, small old planes can no longer do the job and global airline brands are flying in for a piece of the already busy airspace.

Any African airline which wants to expand its fleet as a way to win the continent’s airspace faces a stiffer challenge in the coming years. Airports can no longer hold the surging traffic while governments dilly-dally in fixing the capacity problem largely due to economic challenges which have hurt funding for capital intensive projects.

Ordinarily, the worst outcome for any airline is that economies slow, currencies become extremely volatile making it hard to plan and oil prices surge.

But now, capacity at airports is dimming growth prospects of airlines: Leading airlines such as Kenya Airways, sub-Saharan Africa’s third-largest by passenger numbers have been on an expansion binge but some hubs are increasingly getting clogged.

“KQ wants to grow too, but the rights issue to kick start a new round of aircraft purchases is tough to place,” said analysts at Renaissance Capital in a research report on Airlines and Airports in Africa and the Middle East. “Even if successful, the risks are high as competition for travel in Africa is getting stronger and we believe the state of the Jomo Kenyatta International Airport does not make it an obvious hub.”

Most African airports are expected to see an increase in passenger traffic as the continent opens up to the world for business.

The need to expand the airports is highlighted by the aggressive growth plans most carriers have: To increase their fleet and almost double their passenger numbers in 10 years’ time.

Kenya Airways, the national carrier, is this year expected to raise Ksh23 billion ($270 million) through a rights issues that will help it acquire 21 new airplanes in an expansion plan aimed at deepening its routes in Africa and Asia. The 10-year strategic plan, which runs until 2021 should see the airline deepen its presence in China and India with six and five new destinations respectively planned.

Titus Naikuni, CEO, Kenya Airways said an expanded airport would afford the airline more parking space adding that because JKIA is over stretched, security was also at stake. “We are now forced to take additional measures in order to avoid any potential threats,” he said.

His comments came last week when the airline got the IATA Operational Safety Audit and the IATA Safety Audit for Ground Operation certificates following an audit of its operations.

KQ though has been faced with increased competition especially from Middle East carriers such as Etihad Airways, Emirates, Qatar Airways and Royal Air Jordanian, which are opening up more routes on the continent where the Kenyan carrier draws nearly half of $1 billion revenues.

Part of the problem about Nairobi as a hub is that JKIA handled about 5.5 million passengers in 2010, with the forecast being over 6 million passengers in 2011. The 2010 official figures are double the 2.5 million passengers the airport was originally meant to handle.

But the Kenya Airports Authority (KAA), the parastatal charged with the responsibility of overseeing airports in the country says plans are underway to expand JKIA. By 2013, it is hoped Unit 4 will be constructed helping expand the capacity of the airport to 4.5 million passengers, which, however, is still below KQ’s requirements. 

Construction works of a new terminal worth about $500 million, should see the number of passengers that can be handled by the airport increase to 20 million each year.