Home Business Aviation How airlines’ ownership of airports will reduce losses, by expert

How airlines’ ownership of airports will reduce losses, by expert

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African Airlines Association has called on African governments to develop a policy that would enable their airlines to own airports in their countries or vice versa in order to reduce losses.

A former Secretary-General of the African Airlines Association (AFRAA), Aaron Munetsi disclosed this in an interview in Lagos.

Munetsi pointed out that airlines on the continent, unlike their counterparts in Europe, America or the Middle East, were operating at a huge loss.

He attributed the loss to payment of landing and parking charges, en-route charges, aviation fuel and payment on aircraft lease to lessors.

Ethiopian Airlines is the only carrier on the continent, which owns an airport at the moment, while Kenya Airways was also pushing for same position through its government.

Munetsi declared that the two most important components of aviation were airlines and airports, noting that unlike airlines, airports hardly close shop and called on players in the sector to develop an interest in airport construction.

He said, “Several airlines have collapsed in Africa in the past 10 years but I want you to point to one airport that has collapsed within the same period of time. I still don’t know why people are not looking at setting up an airport rather than an airline.

“Airlines and airports are the most important components of the aviation industry, everything else is peripheral to these two.”

He also agitated for the implementation of the Single African Air Transport Market by African governments, saying that this would lead to growth in the aviation industry on the continent lamented that only 19 per cent of air passengers were airlifted by African carriers from the continent, while airlines outside the continent transport the other 81 per cent, stressing that Africa could not continue to allow foreign carriers to dominate its airports.

He explained further that as of 2016, only Morocco and South Africa received more than 10 million passengers and tourists on the continent, while Atlanta Airport alone in United States welcomed at least 184 million passengers and tourists within the period. 

He insisted that there was a level playing field for all airlines on the continent to thrive but declared that without cooperation, alliance and teamwork, airlines on the continent would continue to remain unprofitable.

Service providers in the aviation sector are making it difficult for airlines in Africa to flourish due to “prohibitive and excessive charges”.

He said it was wrong to say African airlines are not profitable.

Munetsi noted for instance that 38 dollars out of a ticket of $100 goes to airport authority alone, adding that by the time airlines pay other charges to other service providers, they are left with 0.2 per cent profit.

The aviation expert regretted that only 31 out of 54 African countries have signed the SAATM, which he described as the bedrock of the African free continental trade agreement (AfCTA).

Quoting the International Air Transport Association (IATA), Munetsi said African airlines lost $140bn to excessive charges by service providers. “Airport authority charges are so much yet the infrastructure is crumbling,” he observed.

He said there was also the need to harmonize airport charges in Africa, saying, “airports have different charges for the same aircraft, for the same crew. Airlines are losing money because they can’t operate to some airports. It is like a dog fight. Everybody who can charge an airline will charge them.”

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