Africa accounts for 12% of the world's population, but only less than 1% of air travel, he notes. But market growth through liberalization can happen here, as it has elsewhere. A 2006 study on selected air transport markets that have been opened up found passenger numbers increased 69-fold in six years on the Nairobi-Johannesburg route once it was liberalized. The domestic market in South Africa grew by 80% in 1994-2004. When Zambian Airways entered the Johannesburg-Lusaka route—previously monopolized by South African Airways (SAA)—air fares dropped by as much as 38% and passenger numbers increased by 38% at the same time.
But the protectionists still exist. Mozambique has not opened up yet, and, according to the World Bank, air fares for a similar stage-length flight are 163% higher than in South Africa.
Many governments are still imposing very high departure taxes—close to $100 in some countries, such as Ghana—and while their economies have enjoyed double-digit growth rates for years, taxation is still holding down demand. Tanzania-based low-fare start-up Fastjet has backed off plans to launch an operation in Ghana simply because it has failed to negotiate lower departure levies. Of course, taxes that are twice as high as the air fare are a serious hindrance for any airline model.
Although West Africa is the most densely populated region on the continent and is also rich in natural resources, none of the developed African carriers is based there. It has seen a number of high-profile failures, such as Virgin Nigeria, that gave up because of political pressure and, ultimately, violence. In spite of its potential, quick progress appears unlikely.
A potential role model for developing air traffic in West Africa is Asky Airlines, according to Seabury consultant Stephan Heinz. He argues that the days of the small national carriers are over, because of their weak economics, small networks and few connecting opportunities, and that there are some limited chances for low-fare airlines to grow. “The ability of a small carrier to simulate stronger connectivity through a partnership is evident in the Asky case,” Heinz writes in his study of African airline models.
Asky is a joint venture between Ethiopian Airlines and local private investors. Ethiopian holds a 40% stake and provides management expertise. The airline was set up in 2010 and operates six aircraft mainly from its base in Lome, Togo. Its schedule is harmonized with Ethiopian departures for Addis Adaba, providing vital air links between West and East Africa connecting through the mini-hub.
Up to 42% of its revenues are now coming from passengers flown in and out by Ethiopian connecting services. That is the case in Lome, but contributions are also significant in Bamako, Mali (38%) and Accra, Ghana (20%).
While the Asky model may work well, the carrier is also an example of the inability of the African airline industry to establish services freely. Ideally, Asky would be based in Lagos, Nigeria, a far bigger market that could be developed into a very lucrative base, if political circumstances allowed.
Africa's airlines are also feeling the effects of shifting market forces. Historically, European carriers have been the strongest competitors on long-haul routes and now Middle Eastern airlines have to be taken into account, too. All three major Persian Gulf carriers—Etihad Airways, Qatar Airways and Emirates—are expanding aggressively in the region both by adding new destinations where possible in the framework of bilateral air service agreements and through partnerships. Etihad has just added two of Africa's big four—SkyTeam member Kenya Airways and Star Alliance member SAA—to its growing portfolio of code-sharing partners. Emirates has announced its intention to team up with Fastjet, although that cooperation is being stymied by the low-fare carrier's current inability to grow significantly beyond its existing base in Tanzania.