New operators and services are entering new markets but, as ever, there are only two options when it comes to buying wide-bodied aircraft: Boeing and Airbus. Neil Ford reports.
According to figures from Airbus, Boeing held an 81% market share in 1995, with Airbus taking the remaining 19%. Now, however, the European consortium puts the balance at 51% to 49% in its favour. One of the three biggest African airlines, Kenya Airways, recently added to its existing fleet of 42 aircraft when it took delivery of two Boeing 777-300ERs.
The aircraft will operate on the Nairobi-Amsterdam and Nairobi-Guangzhou routes, as the company continues to roll out new long-haul services. The company has also announced that it will lease two Boeing 737-800 aircraft from GE Capital Aviation Services from early 2015.
Ethiopian’s fleet is almost entirely dominated by Boeing but the company is currently weighing up an option for 30 narrow-bodied Airbus aircraft to drive its rapid expansion plans. Chief executive Tewolde Gebremariam says that his company would make a decision by the end of June. Whether opting for Boeing or Airbus, the deal would be worth about $3bn. The company is seeking to become the dominant player in African aviation by setting up hubs in every region.
After its hubs in Addis Ababa and Liège in Belgium, it became a partner with ASKY Airlines in 2010, founded by Gervais Koffi Djondo (co-founder of Ecobank), to operate from the Togolese capital Lomé, which it has made its West African hub.
Ethiopian is currently assessing potential candidates in Central and Southern Africa but the most likely options are to be in Democratic Republic of Congo (DR Congo) and Malawi. Ethiopia bought a 49% stake in Malawian Airlines last year, while DR Congo is the missing link in its African trade, both in the air and on the ground. Flights from a DR Congo hub airport could reach anywhere on the continent in less than five hours.
An African global hub?
Ethiopian Airlines is particularly keen to make the most of Addis Ababa’s location in the Horn of Africa. Passengers travelling from North America or Europe to Asia could be reluctant to fly further south on the African continent to pick up a connecting flight but Addis Ababa could compete with Dubai as a hub airport.
As a result of its new service to Beijing, Ethiopian now flies to Chinese destinations 28 times a week and is looking to expand this coverage. The airline has set targets of carrying 18m passengers a year by 2025, with 112 aircraft operating on 92 routes. In December last year, Ethiopian began operating a thrice-weekly route to Singapore via Bangkok. This is a welcome addition given the rapidly increasing trade and investment ties with the Asian commercial giant.
The company has also invested $52m in the Ethiopian Aviation Academy in an attempt to develop an aviation sector institute of global importance. About 1,000 students are currently enrolled at the Academy with the aim of becoming pilots, cabin crew, engineers and marketing staff. This figure will be ramped up to 2,000 by 2017 and 4,000 by 2025, with the intake split roughly equally between Ethiopian and non-Ethiopian students.
Low-cost airlines are still likely to be the future of African air travel but the model has not taken off as quickly as some had anticipated. South Africa has seen a string of low-cost airlines come and go in recent years but many in the industry believe that there is room for new operators. 1time folded in 2012 and an attempt to relaunch it as Skywise earlier this year was rejected by the Department of Transport because its licence had expired.
Potential new entrants in the market include fastjet and FlySafair, while consultants Blue Crane Aviation have applied for a licence for their new company, Fly Blue Crane, which is led by a number of former SAA executives. In May, a company spokesperson announced: “We are preparing the ground for a regional airline, looking specifically at underserviced routes.”