AFRICA

18 | Airline Business Daily @ Routes | 20 September 2015

Africa remains a region ripe for tourism development, but the recent terror attack in Tunisia is a reminder of how instability and a lack of liberalisation present challenges to fulfilment of its potential

SECURITY MATTERS

G iven that nine of the world’s 20 fastest grow-ing economies are in Africa, it is hardly sur-

prising that IATA predicts sus-tained annual growth of 5% for African airlines over the coming two decades.

The industry group’s forecast may even be conservative. A separate report by consultants Intervistas estimates that intra-African liberalisation in just 12 countries would rapidly unlock latent demand for five million new passenger journeys a year, more than doubling traffic in heavily protected markets like Angola and Algeria.

Yet rosy forecasts have been made about the continent before – and have generally been proven wrong. In 2014, African traffic grew at the slowest pace of any re-gion: just 0.9%, compared with 13% in the Middle East.

The toxic combination of heavy regulation, poor infrastruc-ture and substandard safety was exacerbated last year by West Af-rica’s Ebola epidemic, before being dragged even further down by a wave of terrorist violence emanating from Somalia, Nigeria and Libya.

For airlines weighing up route launches in Africa, the scale of opportunity on the continent seems to be matched pound-for-pound by the vast – and often un-predictable – challenges thrown in their way.

WORST FEARSMany of the industry’s worst fears came home to roost in 2015, when the Tunisian tourism mar-ket was targeted by Islamic State militants in two devastating ter-ror attacks. A total of 58 foreign tourists, mostly Westerners, lost their lives in shootings at the Bardo National Museum in

March and the seaside resort of Port El Kantaoui in June.

Overseas tour operators re-sponded by pulling out of Tunisia en masse, heeding warnings from several Western governments about the risk of further attacks in the North African country. Hano-ver-based TUI Group, the owner of six European airlines, pegged its Tunisia-related losses at £32 mil-lion ($50 million).

But according to Joachim Ver-mooten, a South African aviation analyst and lecturer in tourism studies at the University of Pre-toria, it is too early to assess the long-term impact on Tunisia’s tourism industry.

While similar attacks in Kenya – notably the 2013 Westgate shopping mall atrocity – precipi-tated a deep and sustained fall in visitor numbers, there are also precedents for a quick recovery. The Egyptian tourism market, for

example, swiftly rebounded after the killing of 58 foreigners in Luxor in 1997.

“Personally, I don’t think that the Tunisia terror attacks will have a permanent or sustained

impact on travel to the country,” he says. “Tourism will, however, be affected in the medium term until perceptions and concerns are relieved.”

Vermooten notes that Tunis has already taken steps to reassure travellers by boosting security at key tourism sites such as beaches, hotels and archaeological attrac-tions. For some governments,

though, this is too little, too late. Whereas Germany and France are voicing confidence in the height-ened security apparatus, the UK’s Foreign Office is advising against all but essential travel to the coun-try because it “does not believe the mitigation measures in place provide adequate protection for British tourists”.

Charter carriers can expect to bear the brunt of such negative travel advisories, owing to the overnight nullification of insur-ance policies for their affiliated tour operators. But even in the scheduled market, the downturn has been sharp. Scheduled flight movements in Tunisia fell 19% year-on-year in August, Flight-global’s Innovata schedules show.

POCKETS OF OPPORTUNITYThough the overall trend is nega-tive, Vermooten says a lack of consensus among foreign govern-ments has created pockets of op-portunity for route development.

“The fact is visits [to Tunisia] do offer exceptional value for money from a tourism perspec-tive,” he argues. “The destination should be promoted [by tour op-erators and airlines] in new-ori-gin markets, through the media and through known celebrities in those target markets.”

Turning to the wider problem of terrorism in Africa, he says perceived “safe haven” countries like Namibia and Botswana also have an opportunity to raise their profile in the current climate. Al-though unlikely to win custom-ers from North African beach visitor, these southern African countries can compete with East African destinations for high-yielding safari tourists. Visitor numbers to Kenya were down 25% in the first five months of

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Africa is on high alert after attacks on tourists in Tunisia

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Opportunities are open for safe-haven

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AFRICA

2015, for example, as Somalia’s Al Shabaab terror group stepped up cross-border attacks.

Unsurprisingly, Mbuvi Ngunze, the chief executive of flag carrier Kenya Airways, is eager to see a different outcome. He believes that tourists, travel companies and the media should move away from simplistic country-by-coun-try assessments.

“There is a recognition that ter-rorism affects everybody,” Ngunze says. “We had a terrorist attack in Paris this year, and one in Copenhagen. Did people stop going to France or Denmark?” He adds: “Countries like Kenya and others that face a terrorist threat require support [from the global community], not distancing.”

His call for solidarity echoes calls made by the World Health Organisation during last year’s Ebola outbreak in West Africa. In that health crisis, as in the cur-rent security crisis, airlines and governments were criticised for abandoning countries in their time of need. Then, as now, over-reactions by some created oppor-tunities for others.

“[Sierra Leone’s capital] Free-town, especially, is an opportu-nity for Air France,” says Frank Legré, vice-president of Africa for Air France-KLM, which re-stored its Paris-Freetown route this summer following a tempo-rary suspension.

“Before the crisis there were two airlines flying nonstop [from Freetown] to the UK: British Air-ways and Gambia Bird. Now there are none. We can connect those passengers.”

Looking beyond specific shocks, West Africa has in many ways become a microcosm of the continent’s cycle of downturns and opportunities.

The sub-region was left isolat-ed in 2002 following the collapse of Air Afrique, its only transna-tional carrier. Yet from Air Af-rique’s ashes have risen two new players – Togo’s ASKY Airlines and Ivory Coast’s Air Cote d’Ivoire – which both use fifth-freedom traffic rights to offer re-gional connectivity beyond their own borders.

LIBERAL INTENTWhile their business models would have struggled in other parts of the continent, they have succeeded in West Africa thanks to broad-based political backing roused by the poor state of con-nectivity during the early 2000s.

“In West and Central Africa all the governments stick to Yamoussoukro, so there’s no issue with traffic rights,” says René Decurey, the chief execu-tive of Air Cote d’Ivoire, in refer-ence to the 1999 Yamoussoukro Declaration that was designed to liberalise cross-border flying, but that has largely been ignored in most sub-regions.

Other West African countries are meanwhile still finding their feet. Ghana, for example, is con-sidered one of the sub-region’s biggest economic success stories – yet its largest airline deploys just three small aircraft.

Vermooten believes that fifth-freedom services should be

stepped up in these underper-forming countries. “Both Togo’s ASKY operation and SAA’s [South African Airways] new flights between Accra and Wash-ington DC contribute to Ghana’s aviation development by build-ing scale and traffic density,

which are in Ghana’s long-term interests,” he argues. “[Without them] it would probably take some years before Ghana would build a critical mass of passenger traffic flows.”

However, by calling for more African countries to open their skies and inject competition into their home markets, Vermooten’s argument comes full circle and the practical challenges of oper-ating on the continent will reas-sert themselves.

PRoTEcTIoNIsm RuLEsFar from boosting the appetite for liberalisation, heavy losses at Kenya Airways, SAA and EgyptAir – three of Africa’s four biggest airlines – have only pushed their governments further into a protectionist mindset.

Until the Yamoussoukro Dec-laration is comprehensively en-forced, foreign operators and private-sector start-ups will con-tinue to be excluded from Afri-ca’s most lucrative opportuni-ties. And in the absence of competitive pressures, large-scale success stories like Ethio-pian Airlines will remain the only exception.

IATA’s prediction and Interv-istas’ assessment undoubtedly look tantalising on paper. But with terrorism looming large over the continent, and with many governments determined to protect their weak flag carri-ers, the forecasts for African avi-ation should be taken with a dose of salt. ■

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Countries like Kenya that face a terrorist

threat require support, not distancing

Kenya Airways’ Ngunze is seeking international support

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African traffic growth was the slowest globally in 2014

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