Welcome to another edition of Travelstart’s FAQ Fridays with me, Nick Paul. Last week Dave Roberts asked us a question:
“Hi Nick, why are African flights so expensive in comparison to Europe?” This has sparked us to make a video about why flights in Africa are so expensive.
Don’t forget to ask your questions in the comments below and we may make them into a video. Click here to subscribe to our YouTube channel: http://bit.ly/1kaNR6q
There are a number of factors and it is a rather prickly issue. I will try breaking it down and hopefully not offending too many governments around Africa.
Here are the factors involved:
This is one of the biggest factors. Africa has 12% of the world’s population, but only 1% of the world’s air traffic. The demand is therefore lower in terms of passenger numbers, which for airlines is not a good thing.
This is evident with a number of routes, for example Cape Town to Windhoek and Cape Town to Maputo, which were recently canceled by certain airlines. These routes were not in demand and profits were not high enough, so the route had to be cancelled.
Low demand also drives up prices a lot. The airlines will therefore use smaller aircrafts on low demand routes as it will cost them less to operate a smaller aircraft for a smaller number of passengers. But when you divide that cost up amongst the passengers, they end up paying more.
This is often why routes such as Cape Town to Kimberly or Cape Town to George cost a fair amount of money, as they are using smaller aircrafts. The cost to operate that aircraft is less for the airline when divided amongst the smaller number of people, it is higher for the individual.
Infrastructure in Africa is pretty poor on the most part. There are very few good roads, very few good railways; so flying is the only option. However, getting the fuel and parts for the aircraft to certain places in Africa is often very difficult and very expensive. This drives up operating costs for airlines.
A lot of airlines within Africa do not have a lot of money to start off with when they launch and they use old aircrafts that are often 3rd or 4th hand. These planes are not particularly fuel efficient, because they use old technology, and with the fuel prices going up it is very difficult for airlines to operate these planes at a profit. This drives up the price of tickets.
Middle Eastern and EU airlines can often therefore dominate within Africa. You often find it’s cheaper to fly with Emirates into certain parts of Africa via Dubai, or Air France to certain parts of West Africa.
This is because Air France and Emirates fly to these airports and a lot the African airlines don’t, and Air France/Emirates has a massive economy of scale due to their other flight routes making large amounts of profit. They can therefore be much more competitive in Africa than most local airlines.
Another big factor is bad politics, many governments do not have bilateral agreements with their neighbors and you will notice that even within parts of Africa the national carriers or the largest airlines don’t even fly to all the neighbors around them.
Finances are often a real issue. National carriers are often the only airlines that can afford to make a loss. In the 2013 financial year Kenya Airways and SAA recently lost around roughly 100 million dollars each. Only government owned companies can ‘afford’ to lose that kind of money and still keep a company going. Private airlines on the other hand would go bust left, right and center.
In some cases thought, state owned airlines can’t handle the pressure. Recently we saw Air Tanzania, Air Malawi, Air Nigeria and Ghana International Airlines all going bust. These are national carriers, all with a government stake in them. But they couldn’t afford to keep them going.
Africa is known to have a high level of corruption in certain countries. What you start to see in certain cases is that state or a private airlines starting to dominate the airline industry within each country and have a monopoly within certain routes. This has a bad affect on smaller airlines.
Take 1Time for example: just before they went bust they operated flights between Johannesburg and Maputo, and complained that it was impossible to be profitable on those routes because the government in Mozambique was refusing to give them allocation for more seats and they were not getting good landing slots. The good landing slots would have meant that they could have served the business market between South Africa and Mozambique. 1Time claimed that the good landing slots were only given to the National Carriers LAM and SAA. This sort of pattern is repeated all over certain parts of Africa; where you have one or two airlines dominating a route, making it very difficult for smaller private airlines to compete.
I hope that this answered Dave’s question, if you have any other questions please ask them in the comments below. Next week we might make it into a video.
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