Kenya has vast growth potential in aviation and technology

Chris Diaz.

Throughout the world, airports cover huge areas and incorporate both hardware and more abstract systems.

These run from the immediately visible and dominating passenger terminals with security and catering, to runways and air traffic control towers, to hidden but vital baggage systems, gate operations, and lighting systems, and strategic organizational investment enablers and compositions such as management and financial responsibility.

Airlines, passengers, and cargo need safe, functional, and affordable airport infrastructure for their operations to thrive.

Global view

Over the past decade, the number of passengers carried worldwide grew at an average annual rate of around seven per cent, putting the total at over four billion passengers per year.

Records show that in the same period, the number of passengers transported in Latin America and the Caribbean surpassed 270 million, and air cargo in the region increased by 25 per cent.

This substantial growth has put enormous pressure on airport infrastructure, making operations more complex and requiring greater investment in both physical and technological infrastructure to optimize its use and provide suitable services for both passengers and cargo.

According to IATA, around 1.2 - 1.5 trillion dollars will be spent on infrastructure developments between now and 2030. Total passenger movements per annum will grow to over 16 billion per annum by 2050.

In 2021, a total of 159 airport projects broke ground worldwide, with a combined value of almost 110 billion dollars.

As reported by Airport Technology, for all projects which began in that year, 59 per cent were based on terminals, either expansions or new developments, totalling over 87 billion dollars in investment combined.

The success of Air India's increasing flights plus Indigo India's airline expansion broke records. Air India firm ordered 72 wide-body aircrafts including new 777 X Boeing aeroplanes - the order includes 140 Airbus A320 neo and 70 A321 neo planes plus the famous 737 max as the largest aircraft orders from India shows globally the growth of cargo and passenger business.

We are encouraging investments and partnerships between Africa and the rest of the world to grow hubs in Cairo, Kigali, Addis, Joburg, Nairobi, and Accra among other hubs across Africa.

Aviation infrastructure in Africa

The air transport industry in Africa is on the resurgence, and aviation is definitely the next infrastructure growth frontier.

One of the largest aviation hubs and businesses will be the 1.3-billion-dollar deal by Qatar to develop and partner with Rwanda as an expansion of the airport business for passenger, cargo, and global centre of aviation excellence.

A quick look at New Addis Ababa International Airport, Africa’s flagship aviation project in Ethiopia, where a brand new 4-billion-dollar airport extension terminal was constructed with the next phase expected to be completed in 2024.

With four runways, it aims to be bigger than London Heathrow and serve as many as 120 million passengers every year.

Another one is down in South Africa - Cape Town International Airport, as Africa’s third largest airport and a global tourist leading destination.

Aviation in Kenya

Kenya is moving fast, with Nairobi, JKIA airport, enjoying expanded brand new terminals and connected to the expressway, has major strategic expansions integrated into the new investments planned for passenger and Cargo business.

As for Kenya’s case, there are huge opportunities just from the many positive steps being made to improve the aviation industry - a brand new first tarmac runway is being built in the world-famous Masai Mara at Angama which will allow more safety and larger aircraft to bring more visitors to the ‘8th wonder of the world.’

Kenya is integrating roads, railways, and expanding terminals and runaway for airports to become the world-class hub of business and creating master plans for airport cities infrastructure.

Already, the expressway has been a game changer that has proved better infrastructure can be put in place. The expansion and improvements at Jomo Kenyatta International Airport (JKIA) have placed Kenya among the countries that are keen on airport infrastructure and were the leading cargo hub in Africa in 2021.

According to a report released two years ago, JKIA secured the number two position after Chicago Rockford International Airport, US, in terms of fastest-growing airports, which has handled over 2,50,000 metric tonnes of air cargo. JKIA has handled 3, 42,579 metric tonnes of cargo and won numerous awards in 2023.

Expansion and modernization of JKIA is a key flagship project under Vision 2030.

This is because of the very critical role that the airport plays, contributing over 10% of national economy plus expansion on green policies and environment friendly.

Presently, JKIA alone supports over 10,000 jobs for Kenyans directly and an additional 60,000 indirectly, making it a nerve centre of the national economy.

Elsewhere, Angola spent 2.1 billion dollars on airport construction. Nigeria, on the other hand, had plans to spend $1.07 billion on such developments.

Tripoli has set aside $2.1 billion for airport construction projects while Algiers set aside $952 million.

SAATM

The Single African Air Transport Market (SAATM) was envisioned three decades ago as the first flagship project under AU Agenda 2063 should come into fruition in the short to medium term.

The implementation of the project is expected to flank the successful operation of the African Free Continental Trade Area (AfCTA) increase free movement of people, investors, and tourists within the continent.

A free air transport market further complements investment, employment, and entrepreneurship to foster, free movement of people and goods, and the roll-out of the regional or African passport. We are pushing for joint pan Africa airlines and now budget airline models so everyone can afford to fly, especially intra-Africa.

Today, Africa represents a mere four per cent of global world aviation traffic. This figure is tipped to the top 10 per cent with a fully operational single African air transport market.

A study by the International Air Transport Association (IATA) and the African Airlines Association (AFRAA) on the implementation of SAATM by just 12 countries predicts 1.3 billion dollars GDP increment, fare savings of between 25 and 35 per cent, five million additional air passengers and 155,000 new jobs.

In the rest of the world, the liberalisation of air transport markets in the United States and Europe has deepened the penetration of air transport while creating large and profitable behemoths.

In the rest of the world, the liberalisation of air transport markets in the United States and Europe has deepened the penetration of air transport while creating large and profitable behemoths.

For instance, airlines in the US and Europe are the most profitable, while low-cost carriers such as Ryan Air have thrived under the liberalised terms.

Despite its limited reach, aviation in Africa still supports and estimated 6.8 million jobs while contributing to 72.5 billion dollars to the continent’s GDP. Over 60 million tourists came to Africa annually as per UNWTO reports.

Tourism has grown over 50 per cent in 2022 with major hotel brands expansion across Africa. Travel and tourism contribute over 150 billion USD to Africa's GDP per annum.

The potential for aviation nevertheless remains largely untapped for a continent made up mostly of landlocked countries with relatively inefficient road and rail, navigation, safety, and infrastructure.

The African Union is pushing for its flagship project, the Single African Air Transport Market (SAATM) to advance the liberalisation of civil aviation in Africa and act as an impetus to the continent’s economic integration agenda.

The challenge is keeping high standards of aviation safety, would class navigation investments, training our staff to ICAO, IATA certifications, and considering new airlines partnerships with airports and governments.

Challenges facing the industry

The industry features a number of financially beleaguered carriers while some national flag carriers have gone under over a combination of underfunding, unfavourable regulation, wrong business modelling and financial misappropriation and some giving poor customer care.

Other factors bedevilling players in the industry cover high user charges, taxes, inadequate airport infrastructure and insufficient management expertise, terrorism and Ebola or health crisis such covid issues reducing travel business.

Countries such as Uganda and Tanzania are only re-establishing their flag carriers following the collapse of what was the East Africa Airways while Rwanda Airlines and Kenya Airways investing in newer aircraft and airport developments.

While the US and Europe aviation industries thrive off intra-airline agreements, consolidation and partnership, Africa’s aviation market remains heavily fragmented with greatest potential and seeking, well managed airline partnerships and strong leadership to grow new aviation business with global alliances.

The picture is however changing because of developments such as the recent Strategic Partnership Framework which seeks to bring together Qatar and Rwanda Aviation business, Kenya Airways (KQ) and South Africa Airways (SAA) among other proposed partnerships.

This model of business needs a lot of inter-government synergy and consistent world-class service, seamless connectivity and competitive affordable transport rates.

The pair of unprofitable carriers which have over the recent past survived on State bailouts seek to establish joint operations in 2023 including common business plans and initiatives.

As a conservationist, I thought, such a partnership could very well usher in the next phase of growth for Africa’s aviation industry.

The future of air transport will see stronger technical, electrical and robotics both in the ground and in the air to take the aviation business to the next level. Sustainable Aviation fuel which is blended with Jet Fuel, is the latest technology with current aircraft infrastructure will reduce CO2 emissions by 60 per cent or more and will be environmentally friendly to achieve net zero by 2050 as per ICAO objectives is a game changer for the aviation industry.

The private sector which contributes to the highest number of business both cargo and passenger growth, looks forward to open skies, expansion of airport master developments/city seamless integration developments, regionally and connecting air travel globally.

The writer, Chris Diaz is a Business leader and Conservationist.

Twitter @DiazChrisAfrica

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