Amadeus Column: Big Growth Opportunities for the Travel Industry

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This year at the International Air Transportation Association’s Annual General Meeting in Cape Town, Director-General Tony Tyler stated that “nowhere is there more potential for aviation growth than on the continent of Africa.”

The numbers back up this assertion; over the last two years, air traffic has increased by 11.5%, thanks to swift economic growth, a growing population, and rising individual wealth.

Africa is increasingly becoming better connected to Europe and over the last decade, 407 new routes have been created. In total, since 2002, 1,161 new routes to, from and within Africa were established.

Not long ago, travellers in Africa consisted mostly of Western business people, affluent locals, and international aid workers. However, a rising number of African businesspeople, citizens with newfound personal wealth, workers from Chinese construction firms, Australian mining giants, and US oil companies are changing the face of the old demographics.

Potential is great, with a projected increase in the number of African households with discretionary income rising from 85 million today to 130 million in 2020.

But Africa still faces many challenges: the airline industry is still over-taxed and overcharged, making it difficult to establish lower fares; some African airports charge high fees, which are well above the world average; infrastructure also needs to be developed in line with the rate of airline development. Only by bringing governments, airlines and investors together can Africa really begin to develop its potential.

We are seeing strong growth in bookings from the regional African carriers such as Nigeria’s Arik Air, and Asky, based in Central West Africa. These carriers are also introducing “hub and spoke” connectivities in Central and Western Africa, although airport infrastructure still hinders this.

Low cost carriers now represent 10% of total traffic in 2012. Even though it has been a mixed bag for them, they’re becoming a reality. Optimising the reach of our travel agency channel to compensate for the online challenges the region still faces is key.

In true African spirit, we are also seeing more cooperation between airlines by increasing interline and codeshare agreements among local carriers. No matter how you look at it, it is clear that Africa presents massive growth opportunities for forward thinking travel providers.

Santiago Jimenez

Director, Sub-Saharan Africa

Amadeus