Air transport is an important catalyst for economic growth and development.
Air transport facilitates integration into the global economy and provides vital national, regional and international connectivity. It helps generate trade, freight business, promote tourism and create employment opportunities.
Global Air Transport Trends
As the global economy becomes increasingly connected, air travel is one of the fastest growing transportation sectors. Air transport provides a total of more than 87.7 million jobs worldwide.
It directly generates employment opportunities within airlines, air navigation service providers and airport operators, and further creates jobs through the supply chain in the transportation of goods and services.
Air transport also plays an important role for tourism, contributing to economic growth, especially in developing countries. Air travel has necessitated the growth of e-commerce and technological advancements in the aviation industry.
The growth of e-commerce in the airline industry is expected to increase the growth of the airline market globally. This is due to the growing economy turning to e-commerce for consumer-to-business, consumer-to-consumer and business-to-business online shopping by transforming itself into a modern service provider and anticipating the expectations of consumers.
For example, AirAsia launched its new AirAsia Shop online platform in 2020, which allows customers to purchase duty-free goods and have them conveniently delivered to their doorstep the next business day.
Innovation accelerated in air transport with the introduction of automation. Growing adoption of automation techniques is expected to drive the global air transportation market in the future.
This is due to the increasing developments of technologies in all industries across the globe. For example, many airports around the world, such as Pittsburgh International Airport (PIT), have adopted autonomous robots with ultraviolet (UV-C) light technology for cleaning and automatic temperature robots. non-face-to-face body contact upon discharge to reduce the risk of COVID-19 infection.
The major factors likely to impede the growth of the air transport market globally are increasing fuel prices and high operating costs. Fuel costs represent approximately 15% to 30% of total operating expenses. However, many companies have programs to avoid fuel costs by entering into contracts to lock in their costs for a set period of time, turning them into fixed expenses.
When fuel prices rise, this contract helps these businesses save on fuel.
When the pandemic started in China in 2020, it sent its shockwaves to countries around the world. And as the number of cases was on the rise, he compelled governments around the world to take tough measures like border seals, lockdowns and implementing strict social distancing measures, in order to stop the impending disaster. .
These actions have had a dramatic impact on the economy as industrialists around the world have been forced to shut down production, leading to supply chain disruptions and deterioration of various industries. Thus, the fall of world markets. However, it is expected that with the continued reopening of business operations, the market will see steady growth in demand in the coming years and more modern aircraft and airports globally.
Air transport trends in the Africa region
Airlines inside and outside Africa are optimistic about the growing opportunities and huge potential of the continent’s aviation industry. Africa is set to become one of the fastest growing aviation regions and hubs over the next 20 years, with annual expansion near and over 5%, according to the Association international air transport (IATA).
Driving this growth is international and African carriers adding more routes to the continent and stepping up their operations by acquiring or forging partnerships with other airlines operating there. Over the past decade, Turkish Airlines has tripled the number of African cities it serves – from 18 to 56, while other airlines in the Middle East, Europe and Asia are also adding routes.
Meanwhile, other African carriers are racing to raise capital to fund their expansion, offering to sell stakes in their companies to other airlines on the continent. For example, in 2018, the continent’s largest airline by revenue and profit, Ethiopian Airlines, signed an agreement to acquire a 45% stake in Zambia Air, resurrecting the Zambian flag carrier more than two decades after its closure.
Vanity airlines are also becoming a thing of the past on the continent, as African governments take steps to turn loss-making and indebted state-owned airlines into self-sustaining operations, usually through restructuring plans or by selling them.
Additionally, another sign that Africa’s aviation industry is experiencing a recovery is that low-cost carriers have started serving second-tier cities on the continent, a trend that industry experts say will continue to grow. and to make aviation affordable.
South Africa’s Kulula became the continent’s first low-cost airline in 2001. Since then, others have followed suit, connecting cities that major carriers find unprofitable to serve at prices that class growing medium can afford.
The airline industry in Africa is growing and its expansion will create millions of jobs in construction, airport technical support, maintenance, customer service and other areas. Once aviation development reaches critical mass, it will become a major driver of Africa’s economy, including taking the continent’s hospitality and tourism industries to new heights, especially with the growth of African continental agreements stimulating the growth of intra-African trade.
East Africa Air Transport Trend
Air transport in East Africa has grown tremendously. However, the East African region has one of the most expensive air routes in the world in terms of cost per seat, led by the Nairobi-Entebbe, Nairobi-Kigali and Nairobi-Dar es Salaam routes. High fares on passenger and cargo flights contribute to the high cost of doing business in the region and actions to make the business more competitive are the way forward for the economic transformation of the region.
The East African air transport service is regulated and remains fragmented, restrictive and expensive due to the existence of different bilateral air service agreements. Regulation of air services should be about safety, not about the airline that travels. Open skies and the arrival of more airlines in the region should be encouraged for investors and trade development.
Although the countries have national carriers, the tickets from one capital to another in the region are relatively expensive, which allows foreign airlines to reduce them, which makes the air activity expensive for the regional airlines . More than 40% of airfare costs in the region are made up of regulatory fees, parking fees and other taxes.
A ticket for a flight from Burundi to Arusha costs $1,000 on an East African airline, but a flight from Burundi to Dubai costs $500. EAC countries should optimize customs union and regional economic common markets. A non-harmonised national tax system affects the free movement of goods, services, labor and capital, the freedoms of which are provided for in the treaty protocols.
Leaders in the region should review policies and fees to spur growth, air transport in East Africa has great potential with operators and passengers eagerly awaiting attractive new business incentives and infrastructure development .
Air Transport Trend in Kenya
Kenya is East Africa’s largest economy and is a regional financial and transport hub. Therefore, Air Transport provides the most efficient and fastest means of transportation to and from Kenya. The country’s high-value perishable goods like fish, flowers, fruits and vegetables are exported by air and in fact, Nairobi was the main hub for cargo trade last year.
Four airports handle international flights, Nairobi Jomo Kenyatta International Airport (JKIA), Mombasa Moi International Airport (MIA), Eldoret International Airport and Kisumu International Airport.
The airlift operation in Kenya encountered several challenges. However, despite the current challenges surrounding the future growth of Kenya Airways, the International Air Transport Association expects the growth of the country’s air transport sector to more than double over the next 20 years.
Africa remains the largest source of air passengers to Kenya, contributing 70% of the total number of visitors per year. Europe comes next with around 585,000 passengers, followed by Asia-Pacific 284,000, the Middle East 233,000 and the United States 210,000.
Dar-es-Salaam is the busiest air route between Kenya and any city pair, followed by Entebbe, Dubai, Addis and South Africa.
The Netherlands is the most active freight market for Kenya, followed by the United Arab Emirates, Turkey, the United Kingdom and Saudi Arabia.
Kenya’s air transport market is expected to grow by 249% over the next 20 years. This would translate to 11.8 million additional passenger trips by 2037.
If met, this increased demand would support approximately $11.3 billion in GDP and nearly 859,000 jobs. As such, although air transport in Kenya has gone through turbulent times, the future looks brighter. Innovative partnerships and new aviation business models, aggressive teams and leadership are pushing the implementation of African aviation manufacturing and transforming the airport development strategy. and competitive.
Trustee in Brand Africa and Business Leader.