High taxes stalling Africa's aviation growth

By John Oyuke

Aviation experts have warned that Africa is unlikely to experience low-cost airlines in the coming years as high taxes hinder growth.

African Airlines Association (Afraa) Secretary General Dr Elija Chingosho said the industry, particularly in Africa is over-taxed, making it difficult to establish cheaper fares and develop the low cost airline phenomena. "To stimulate demand and realise the full potential of the market, governments should reduce the amount of taxes imposed on airlines, passengers and fuel," he said.

Mr Chingosho said at the Afraa convention themed "Harnessing Aviation Growth Opportunities in Africa" in Nairobi that prospects of low-cost carriers in Africa would be driven by the need for affordable airfares by low-income cadres.

Transport Permanent Secretary, Dr Cyrus Njiru, said operating overheads like costs of fuel, personnel remuneration, taxes, personnel training, spare parts and aircraft maintenance has resulted in reduced profits for airlines and service providers. "Increased demand for maintenance, repair and overhaul in Africa is driven by the fact that most African airlines are renewing and expanding their existing fleets," he observed.

Full-service airlines

Low-cost carriers take advantage of low fares to drive up passenger numbers to increase revenue. Like full-service airlines, low-cost carriers are under tight civil aviation rules requiring adequate funding to support safe operation of such airlines.

West and Central Africa have few low-fare airlines while North Africa, perhaps due to the influence of low-cost carriers in Europe have more low-fare carriers.

Egypt has a variant of Air Arabia, which claims to be the largest low-cost carrier in the Middle East and North Africa region.

In Kenya, Fly540 operate as low-cost carrier, using ATR and CRJ-100 and 200 aircraft. In Morocco, Air Arabia launched operations from its second hub in Casablanca in April 2009 with Air Arabia Maroc. In South Africa there are three low-cost carriers.