The Context of the Airline Industry: An African Market Perspective

This chapter presents a holistic overview of the African air transport market in terms of the air transport environment, regulations and airline performance. This chapter explores the growth trajectory within the African region and how this has subsequently propelled a myriad of opportunities ranging from market access, increased international trade and tourism. Overall, the development of African aviation sector has had a significant impact in terms of driving inbound investments for African economies, job market opportunities, as well as giving national governments the opportunity to generate revenue streams through taxes. The chapter makes further highlights the significant strategic importance of intra-African connectivity and this is because of its propensity to drive both economic growth prosperity and development. Despite huge market potential derived from air transport growth, the African region still faces major headwind challenges. The African aviation market underperforms especially in terms of profitability, growth and sustainability of airlines compared to any other markets. Challenges in the airline industry affecting tourism growth have also resulted in declining yields, rising costs, lack of profitability, restrictive bilateral agreements and an extremely slow liberalization process and a lack of stimulation of new markets. Other internal pressures include rigid regulatory frameworks, high-ticket prices and high operating costs in comparison to other regions.