This book provides a comprehensive overview of the African air transport market from a strategic management perspective.
Drawing on well-grounded theories, research applications and real-world case studies, it examines competition dynamics, interconnectivity, the growth of low-cost carriers, and demand patterns in air transport for both passenger and cargo traffic. It also presents an expert analysis on the introduction of the Single African Air Transport Market (SAATM), made possible by the liberalization of the air transport market, from a regulatory perspective. Based on the results of the analysis, the book evaluates both the benefits and limitations of an open skies agreement. Furthermore, it shed lights on the challenges and complexities of African public infrastructure investments and airport financing, discusses the impact of COVID-19, and provides strategic recommendations for airlines.
The book is aimed at professionals in aviation and airline industries and students interested in the African air transport market.
Author(s): Eyden Samunderu
Series: Advances in African Economic, Social and Political Development
Publisher: Springer
Year: 2023
Language: English
Pages: 245
City: Cham
Acknowledgements
Contents
About the Author
Abbreviations
Chapter 1: The Context of the Airline Industry: An African Market Perspective
Introduction
Situation of Air Transport Market (i.e. Demand and Airlines) and Recent Trends (i.e. Capacity and Demand)
Case Study: Ethiopian Airlines
Brief Background
Ethiopian Airline Operations
Strategic Partnerships
Potentials and Challenges of the Air Transport Market in Africa
African Aviation Connectivity and Infrastructure Development Challenges
Obstacles and Dilemmas
Intra-Africa Connectivity
Measuring Airline Performance: African Markets
Conceptualizing Airline Performance Framework
Effects of COVID-19 on African Airlines Performance
Conclusion
References
Chapter 2: Air Transport Regulation: A Perspective on Africa´s Regulatory Framework
Introduction
North American and European Union Air Transport Liberalization: Historical Perspective
Yamoussoukro Decision
The Regulatory Framework
African Aviation: Internal Versus External Pressures
Effects of Liberalization
South Africa
Kenya
Ethiopia
Nigeria
East African Community
Demand and Supply Patterns of Air Travel
African Aviation Cost Structure
Fuel Costs
Financing, Insurance and Leasing
Distribution
Maintenance and Ground Handling Services
Labour
Safety
Single African Air Transport Market (SAATM)
Alignments in Regional Economic Groups in Africa
Northern and Western Africa
AMU: The Arab Maghreb Union
The League of Arab States
Arab League open Skies´ agreement
ECOWAS: Economic Community of West African States
West African Economic and Monetary Union
The Banjul Accord Group
CEMAC: Central African Economic and Monetary Community
The Air Transport program of the CEMAC states
Southern and East Africa
COMESA: The Common Market for Eastern and Southern Africa
SADC: The Southern African Development Community
The East African Community
Regional Economic Community: The Path Ahead
Measures to be Explored for the Aviation Sector
References
Chapter 3: Emergence of the Low-Cost Carrier Model in Africa
Introduction
The Low-Cost Carrier Model
Global Market Leaders
Low-Cost Carriers in Africa and the Middle East
LCC Growth in Africa
Low-Cost Strategy
Structural Challenges to the Low-Cost Carrier Model in Africa
East African Air Transport Market
GDP Development
Foreign Trade and Investment
Demand and Supply Patterns
Infrastructure
Financing and Aircraft Leasing
Low-Cost Carrier Aircraft Market
Distribution
Maintenance and Ground Handling Services
Labour
Concept of Sustainability
Economic Sustainability
Low-Cost Carrier Capacity
Conclusion
References
Chapter 4: Demand Patterns in Air Passenger Transportation: Application of Gravity Model
Introduction
Econometric Modelling
Spatial Econometrics
The Spatial Econometric Approach to Estimating Panel Data Model from the Airline Industry
Gravity Model for Forecasting Air Transport Market Potential
Estimating Potential Market Demand Using Gravity Model
Dependent Variable
Explanatory Variables
Population
Airfare
Model
The Demand Study Survey
Demand Analysis: Gravity Model
Application of Fare Cut to Demand Forecast
The Potential for Low-Cost Operations from a Theoretical Perspective
Demand Analysis: Survey Analysis
Analysis of Travel Characteristics
Mode of Transportation and Importance of Certain Trip Factors
Air Transportation Usage
Trip Costs
Interim Conclusion
Research Study Example
Consumer Surplus
Gravity Model: Detailed Description of the Model
Intervening (InterveningAB)
Variables Pertaining to the Bilateral Agreements: Bilateral Factors (0, 1) AB
Using the Model to Estimate the Traffic Impacts of Liberalization
Economic Impact Parameters
Indicative Findings
Frequency Model
Results from the Econometric Analysis
Conclusion
References
Chapter 5: Africa´s Air Transport Infrastructure: Challenges, Complexities and Opportunities
Airport Operations
African Civil Aviation Commission
Investment and Growth in Air Transport
Changing African Aviation: What Lays Ahead of Africa´s Skies?
African Airport Infrastructure
Challenges and Complexities
Private Sector Engagement in Airport Infrastructure
Regulatory Environmental Factors
Project Parties
The Theories of Resources and Capabilities: Strategic Management Perspective
Resource-Based View
Core Competencies
Dynamic Capabilities
The Impact of Tourism on Promoting Public-Private Partnerships
Case Study: Ollombo Sassou N´Guesso International Airport
Air Traffic Control
The Role of the African Development Bank in Airport Infrastructure Financing
COMESA Airspace Integration Project
Location
The Financing Gap
Leveraging Private Sector Engagement to Foster Airport Infrastructure Improvement
Airport Privatization Models
The Impact of COVID-19 on Airports
Herfindahl Index
Conclusion
References
Chapter 6: Tourism Development in Sub-Sahara Africa and Impact on Regional Airline Business Models
Definitions of Tourism
Types of Tourism
Foreign Tourism
Domestic Tourism
The Value of Tourism
Kenya Tourism
Engine for Sustainable Economic Development
Tourism as a Generator of Employment
The Impact of Tourism on Infrastructure Development
Tourism Stimulates Socio-Cultural Heritage Conservation
Empowering Women, Young People and Marginalized Populations
Tourism in the Southern African Development Community
Key Characteristics of the Tourism Sector in Africa
The Role of Aviation in Tourism Development
Challenges in Aviation Industry
Air Transport and Tourist Flows
Growth and Change in the Global Airline Industry
International Framework for Aviation Regulation
Paris Convention
Convention on International Civil Aviation (Chicago Convention)
Bermuda Type Agreements
Regional Tourism Development
Tourism´s Contribution to Local and Regional Development
Regional Tourism Policies
Importance of Aviation Sector and Tourism Industry
Economic Benefits of Aviation
Social Benefits
Strategic and Operational Measures to Be Taken by Airline Carriers to Foster Development of Tourism in Africa
Strategic Controlling
Operational Controlling
Airline and Regional Tourism Policies
Impact of COVID-19 on International Tourism and Air Transport
COVID-19 Impact on Air Cargo Capacity
Global Perspective: Impact of COVID-19
Case Study: South African Airways (SAA)
Brief History
Fleet Structure
Prime Period
The Outlook for the Aviation Sector
Overview Environmental Policies in Aviation
Aviation Industry Adaption to Climate Change
Conclusion
References
