In my previous post, I talked about the different opportunities that could favor the establishment of a low cost carrier in Africa. However, in spite of these opportunities, there are several challenges that could impede on this innovation.
The African market is very unique in the sense that the rapid expansion in Africa's aviation industry is hampered by a number of factors such as:
- Poor record of safety and security
- Protectionism from governments
According to me, one of the biggest challenges facing African airlines are safety regulations. In effect, the poor safety record which damaged African airlines could significantly jeopardize the launch of a LCC within the continent as; several carriers are banned from European airspace by safety regulators.
In an attempt to operate between African states, it would not be sufficient to persuade the licensing council that the carrier is able to safely and efficiently operate within states. Indeed all traffic rights are controlled in terms of bilateral agreements which date back to the late 1940s and the creation of the UN and the International Civil Aviation Organization (ICAO), in which these bilaterals specify the routes and the frequency of flights each airline serves. These agreements are settled at a government-to-government level and are considered as an artificial barrier to entry, which inhibits supply and consequently, demand. Therefore, breaking this monopoly and obtaining some reform into the system could prove to be beneficial. But how? - Now that is the question.
Despite the growing awareness of the role that the aviation industry could play in the development of the continent, the industry is still not the top priority of African governments. Additionally, despite increased liberalization of the African aviation industry and the growing presence of foreign companies, some African governments are still reluctant to open their skies fearing foreign competition could undercut national airlines, some of which are short of commercial viability besides being just symbols of sovereignty.
Are there any other challenges you think can hinder the establishment of a LCC within Africa? Please feel free to comment and share your thoughts.
Low cost carriers thrive very well in places where the operating costs are low. However in Africa, airport charges are expensive and also aviation fuel is also very expensive thus putting financial burdens on the other airlines. LCC need airports with low charges and cheap fuel to operate, they work well when the operating costs are low. But with high airport charges and high cost of jet fuel how are they going to be successful?
ReplyDeleteHI James,
ReplyDeleteThank you for your comment. Indeed the challenges you've outlined are sensible and valid ones. The key in successfully operating a LCC in Africa I believe revolves around partnerships in which one needs to have the governments support and partner with local operators or airports. Hence, building relationships with these parties could not only unify African governments, but will also potentially enable a pan African service within the continent.
Once again, thank you for your comment.
Regards