The global health crisis continues to take its toll on the aviation industry, creating uncertainty for airlines around the world. However, the African market is primed to be well-positioned for recovery. Simple Flying had the opportunity to speak with former Africa World Airlines (AWA) COO Sean Mendis about how carriers across the continent will fare following the pandemic.
Not sitting around
Mendis emphasizes that Africa hasn’t had the luxury of being able to wait for a vaccine to be developed and rolled out. This is because it would likely be among the last markets to receive it. Notably, African governments and airlines had to improvise on a home-grown solution, and they began to do that by June 2020 with a travel testing regime.
Over 40 African countries have now been able to open their borders with some sort of pre-travel RT-PCR testing. These processes sometimes have supplementation by other protocols as well. However, they are, for the most part, focused on testing rather than quarantines or vaccines. As a result, Mendis feels the expansion of cheaper, more reliable, and quicker testing solutions will be more of a game-changer for African aviation recovery than vaccines will.
Africa has already somewhat opened up. Yet, the high additional testing costs right now have been a fairly major barrier to a full recovery. As this aspect improves, African aviation will likely recover much faster than markets in several other continents.
Plenty of potential
Mendis adds that African aviation will continue to grow strongly. Ultimately, because demand has been repressed for so long, it must eventually break out. There are also emerging markets that need to be catered to with modern techniques.
“The current traffic is barely scratching 10-15% of the potential demand, and we could write volumes on the many factors that contribute to this. Africa is a young continent with the majority of the population soon to consist of “Millenials.” With the explosion of internet and smartphone penetration across the continent, these are now “globalised” consumers who are perfectly comfortable with e-commerce, but also demand certain standards from the brands they identify with,” Mendis told Simple Flying.
“The growth in the air travel market is not going to come from existing premium travelers (government and high-end business travel) flying more, but rather from new consumers – both the “Millenials” now entering the workforce, as well as the growing number of middle-class consumers who now have increased disposable income. The airlines who are able to reach out to these new consumers most effectively will be the ones who are successful. That means more social media type engagement rather than legacy marketing such as newspaper advertising for example.”
Tapping into the market
Mendis highlights that this modern media approach is something that AWA is very proud of achieving. The airline managed to grow direct sales to around 60% of total passengers from barely 5-10% just a few years ago.
The company was also able to attract new consumers through promotions like its online “WOW! Wednesday” sales, where it made highly restricted off-peak tickets on domestic routes available for prices as low as the equivalent of US$8. With this, the firm created a legitimate option for travelers who otherwise might rely on buses or other forms of ground transport.
Altogether, Mendis feels that the basic concepts that the likes of Ryanair, AirAsia, and Spirit Airlines have successfully implemented in other markets will hold true in Africa too. Features include lower fares, unbundled services, and direct sales. These factors will be the key to driving growth at the bottom end of the market.
Giving a chance
The businessman summarizes that from a policy standpoint, history has shown that the biggest driver of air traffic growth in all markets has been liberalization. This, in turn, leads to lower fares, more competition, and stimulated demand.
However, he feels that this factor will continue to remain repressed as long as governments, well-meaning as they may be, continue with market-distorting policies such as subsidizing/launching loss-making national carriers.
This procedure restricts access to markets, and places air transport as an easy target for additional taxation. Mendis believes that the role of governments should be to create an enabling environment for their constituents and not to over-regulate them and hence stifle innovation and private sector investment.
Above all, there are positive prospects for the African aviation industry. If carriers with determination can have the opportunity to cater to future demand, there could be a transformation in market. 2021 will undoubtedly be a crucial year in the road to recovery following the pandemic.
What are your thoughts about the future of the African aviation industry? What do you make of the market’s recovery prospects? Let us know what you think of the situation in the comment section.