Airline traffic in Africa forecasted to grow 5.4% annually through 2040

Airlines in Africa are expected to grow their fleets by 3.6 per cent per year to accommodate passenger traffic growth of 5.4 per cent annually, making it the third highest growth rate in the world, according to the latest Commercial Market Outlook by Boeing. Aviation Analyst Manny Kanabe joined CNBC Africa to discuss the forecast and the future of the aviation sector on the continent. Boeing's responsibility as a key player in the industry lies in creating a forecast of the global aviation market. They predict that 80 percent of the growth in the sector will come from the demand for new fleets, with the remaining 20 percent focused on renewing old fleets. This outlook suggests a significant opportunity for growth in aviation in Africa, leading to an increase in the demand for aircraft. Recent conversations and the signing of a Memorandum of Understanding (MOU) between Kenya Airways (KQ) and South African Airways (SAA) have hinted at the potential creation of a pan-African airline. Industry analysts have suggested that consolidation could be the way forward for airlines on the continent to improve profitability. Collaboration and consolidation are seen as key strategies for airlines to achieve sustainability in the long term. However, challenges such as differing agendas and ownership aspirations among African countries may impede the progress towards consolidation. The entry of international airlines setting up hubs in African countries could pose a threat to local African carriers. Foreign airlines often dominate the market, leading to challenges such as high foreign currency outflows from the continent. To effectively compete with these foreign carriers, African airlines need to enhance their operations and service offerings, aiming to be as competitive as their international counterparts. Drawing comparisons with successful aviation groups like the Lufthansa Group, where Air France collaborates with KLM, the potential for partnerships and code-sharing agreements among African airlines could be a pathway forward. Collaboration and resource-sharing amongst African carriers are essential in the capital-intensive aviation industry. By cooperating and leveraging each other's strengths, African airlines can work towards enhancing the overall competitiveness and growth of the African aviation market. In conclusion, the forecasted growth of the aviation sector in Africa presents a promising opportunity for the continent to position itself as a key player in the global aviation industry. Collaboration, consolidation, and strategic partnerships are essential for African airlines to navigate the evolving landscape of the aviation sector and compete effectively on a global scale.