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The travel and tourism industry in sub-Saharan Africa was remarkably resilient during the recent economic crisis and although the industry remains small compared to other regions, growth in arrivals was maintained throughout 2009, and revenues in all sectors increased.
The positive economic and business climate in Africa, coupled with the increased demand in both leisure and business tourism, has led to overseas airlines strategically positioning themselves to capture a larger share of the continent’s air transport market.
Major carriers such as Emirates, Qatar Airways, British Airways, Brussels Airlines, Lufthansa, Turkish Airline, Swiss International and Delta have introduced new African routes on their networks, increasing frequency to tap into the economic development of Africa.
Ghana is gradually becoming the hub of air transport in West Africa. Only in the last few months, the Kotoka International Airport (KIA) has experienced the opening of a number of flights to Accra, including Asky from Togo, Delta’s new flight from Atlanta (US), United Airlines from Washington (US), Virgin Atlantic from London (UK), Brussels Airlines from Belgium and the latest of Turkish Airlines from Istanbul (Turkey) in July 2010.
Furthermore, nine new international airlines are looking to operate there in the near future – mainly from countries such as China, Singapore, Qatar and Brazil.
Overseas airlines are benefiting from partnerships and alliances such as oneworld, Star Alliance and Skyteam in order to reach more destinations and increase air traffic. KLM has a partnership with Kenya Airways and India’s Jet Airways entered into a code sharing agreement with Kenya Airways (KQ).
In addition to oversees airlines, African airlines such as Kenya Airways, Ethiopian Airlines, South African Airways, Egypt Air and the Royal Air Morocco have also been increasing their presence in the region and connecting their hubs to other international routes.
The home-grown low-cost carrier (LCC) market is very much in its infancy in sub-Saharan Africa. With air travel restricted to a small percentage of the population, development has so far centred in South Africa, which has a population with a much higher average annual disposable income. Nevertheless, as emerging markets grow more important as trade partners, LCCs are expanding their network to other regions in line with investment prospects.
There are currently four LCCs based in the region: Kulula, Mango and 1time in South Africa, and Fly540 in Kenya. Kulula is owned by British Airways’ regional franchise Comair, whilst Mango was established by South African Airlines.
There are also a number of European and Middle Eastern LCCs serving destinations in Africa, including Djibouti by Felix Airways and flydubai, Kenya by Air Arabia, and Sudan served by Nas Air, Air Arabia and flydubai.
Kulula operates an entirely domestic schedule within South Africa, as does Mango. 1time has recently started flights to Zanzibar, and Livingstone in Zambia. These LCCs came onto the market just as online purchases were starting, and today Kulula remains one of the country’s largest on-line retailers, with over 80% of all flights booked online.
1time is the largest of these three LCCs, offering the most seat capacity on its routes, and is the only one currently to operate any international flights. It has a 7% share of the domestic market, which is still dominated by the legacy carriers SAS and British Airways. Its stated target is to achieve a 12% share on its routes.
Kulula follows close behind 1time on seat capacity, flying eight routes from six airports. It is dominant around the Johannesburg area, as it is the only LCC to use the main airport, Tambo, and the strategically placed Lanseria, halfway to Pretoria. As a result, Kulula offers greater frequency when both these airports frequencies are combined, but 1time is the leader for South Africa as a whole.
With the objective of becoming Africa’s first budget airline, Fly540, the Kenya-based airline is promising to extend its services to other African regions, according to the airline’s marketing.
Uganda is the carrier’s first target, spreading then to Tanzania with Mwanza as the first destination due to the increase business travel in this region. There are also plans to extend the services to Dar-es-salaam, Zanzibar, Moshi, and Kilimanjaro, before further extending into Angola and Ghana which will act as hubs for Southern Africa and West Africa, respectively.
The project will make Fly540 the first pan-African LCC, with hubs in 3 African sub-regions, improving travel within the continent, as well as enabling the marketing of the East African brand as a single tourism destination.