Revival on the cards for West African Aviation

The year 2020 and 2021 have been loaded with discussions on economic losses, demand-supply mismatch, pandemic challenges and more. West African economies also faced similar challenges and they are still making their recovery steadily but slowly.

Even as 2020 and 2021 have largely been about living through the pandemic and struggling to revive many African economies are now beginning to make a comeback.

The pandemic forced many airlines to completely ground their operations from April to August 2020. Further, in 2020, the lockdowns and travel ban affected the belly cargo capacity of airlines, leading to an overall yearly drop of 23 percent, according to the International Air Transport Association (IATA). Cargo traffic also declined, affected by the disruptions in manufacturing, supply-chain logjams and trade worldwide.

Despite the challenges, Africa’s biggest carriers have responded to the crisis in different ways and there is a growing feeling that the crisis has in fact ended up speeding up ongoing developments in the industry, with struggling airlines forced to take desperate measures and the few success stories becoming increasingly dominant.

African airlines have recorded a 34.6 percent surge in air cargo amid a marginal improvement in demand, globally, reports  IATA in its latest data for the month of September 2021.

In West Africa, some countries achieved positive growth in 2020, due to the relatively low spread of the virus and the less restrictive containment measures. However, the regional GDP globally contracted by 1.5 percent. Countries like Benin, Cote d’Ivoire and Niger posted positive economic growth, while others like Capo Verde, Liberia and Nigeria saw recession, reports the African Airlines Association (AFRAA).

Talking about West Africa’s developments, the continent is expecting to move on from the past and recoup from the imbalance of demand and supply, pandemic-related challenges in the aviation, logistics, air cargo, shipping sector and more.

Demand picks up in West Africa
As one of the largest oil reserves in Africa, Nigeria, which is located on the Western coast of Africa, ranks 26th as the largest economy in the world. According to IATA, the air transport industry, including airlines and its supply chain, is estimated to aid the GDP in Nigeria by US $600 million.

While many airlines were completely grounded in 2020 due to the pandemic, some services have been reintroduced recently. However, the operating environment remains very difficult.

Many industry experts believe that West Africa lacks the availability of a full-fledged MRO (Maintenance, Repair and Operations) facility. Thus, the opening of an MRO facility in Nigeria is said to open opportunities for stakeholders and venture capitalists from different airlines and aircraft owners to invest in more MRO facilities.

A single, complete MRO facility in Nigeria is expected to lead to the repopulation of aircraft traffic in Nigeria, in addition to a drop in airfares, crude oil prices and lifting of the foreign exchange ban on the aviation industry.

Aero Africa, a leading air cargo management group dedicated to providing logistic solutions in Africa, is focusing on two main hubs in the West African region for the coming year, Lagos in Nigeria and Accra in Ghana.

“There are a few flights, coming in from Europe, mainly France into the West African region and mainly from Air France. And then there are the Middle Eastern carriers like Emirates, Etihad, Qatar, that we are servicing, mainly Dubai-Lagos and  Dubai-Accra with bigger volumes. And the majority of their cargo is either coming out of China, Southeast Asia, where there is always a big demand, while there is a backlog in Dubai and then the cargo goes on to West Africa,” said Jade Da Costa, Chief Commercial Officer, Aero Africa.

Earlier this year, a report on West Africa stated that Nigeria had lost the West African air market to Ghana as no Nigerian airline was operating to destinations such as Accra, Abidjan, Dakar, Freetown, Monrovia and the Gambia. Since international flights started on September 5, last year, no Nigerian airline has been operating any of the above-mentioned routes, which are currently dominated by Ghana-based African World Airlines (AWA), Asky, Air Senegal and others.

One of the key carriers, Ethiopian Airlines, which ranks first in the top 10 international airlines in West Africa, moves all the cargo headed to Asia into Addis Ababa where they have freighters that are in service in West Africa.

“Today Ghana has regional capacity but Nigeria has none. There used to be a time when Nigeria dominated the air travel market in West Africa. Nigeria can rebuild the market because Nigerians travel a lot,” says Ikechi Uko, a travel expert and organiser of Akwaaba African Travel Market. 

Almost everyone in the aviation business is saying, let's get through the first quarter of 2022 and see where we get.”

Jade Da Costa, Aero Africa

E-commerce blooms
Lately, big demand has come into the West African region during the Covid-19 phase from the e-commerce sector.  E-commerce has boomed throughout West Africa and increased by 30 percent.

“The express carriers, who are traditionally carrying e-commerce, like DHL and all the major express carriers out of Europe and the US have also seen an increase in demand by 30 percent. So, they have to move the cargo traditionally out of the US into a hub in Europe, then from the hub in Europe, they put it on a southbound service, either on a commercial carrier, if they can get anything with Air France or Cargolux, or some of the carriers have their own long-range (flights),” adds Jade.

“The DHL service has its own aircraft based in West Africa that serves smaller countries. They operate in Bamako, Ivory Coast, Cameroon and get to many difficult or remote places, but this demand has occurred because of e-commerce, as everyone is sitting at home and ordering off their phones. So, there's that demand,” he added. 

Perishables buoy demand
Owing to the exports of perishables out of West Africa and into Europe, the USA and the Asia Pacific region are also experiencing increased demand. “Preserving product quality and maximising shelf life are the key objectives behind perishable supply chains. It’s now been over a year since we restarted regular flights to Abuja and Lagos on 777s from London-Heathrow after a brief pause due to the pandemic. It is a vital route for so many exporters seeking to serve consumers and the UK retailer demand for perishable goods such as tropical fruits,” said Freddie Overton, Regional Commercial Manager for Europe and Africa, IAG Cargo.

Many of the developments and announcements about air freight capacity taking place in the West African region are also expected to help the region stabilise the demand and supply chain ratio by 2022.

Recent developments
More recently Ibom Air, a commercial airline owned by the Akwa Ibom State Government, has signed an agreement with Airbus for the purchase of 10 A220 aircraft to boost its fleet at the Dubai Airshow 2021.

Nigeria is one of the major economies in Africa and offers considerable potential for increased domestic and regional travel. Therefore, the Airbus A220 is the ideal choice for the company, the aircraft offers great versatility for both short-haul and intercontinental routes.

Ibom Air currently operates two A220s and the airline flies to Uyo, Abuja, Calabar, Enugu, Lagos, and Port Harcourt. The purchase of the new A220s will enable the airline to continue on its growth path, offering new routes across not just Nigeria, but to the West African region and to Africa at large.

“To facilitate this growth in the exports of perishables out of West Africa and into Europe we introduced a new route to Dakar, Senegal in October, that will allow perishables such as green beans, mangos, melons and fresh fish to reach mainland Europe, UK and USA as quickly as possible via our hub in Madrid. This route will also be key for the import of electronics and pharmaceuticals into Dakar,” says Overton. 

Incidentally, IAG Cargo now services over 25 flights a week into the region, flying directly to Accra, Lagos and Abuja from London-Heathrow, and between Dakar and Madrid. These routes are all serviced with wide-body aircraft, and are now utilising A380s between London-Heathrow and Madrid allowing cargo to travel faster and seamlessly onto the Asia Pacific and transatlantic routes.

“A lot of operators are talking about positioning more aircraft on the West African routes. But aircraft are so difficult to get now, as everyone is looking for an aircraft. And if you order a new aircraft, the wait is for about 24 to 36 months, which is a long one for us to have that equipment available. And especially if the demand in Asia, the US, Europe is so hot, we are not going to get the capacity that we are looking for. So, it's going to be another tricky 24 months,” says Jade.

Aero Africa is in talks with partners in Europe for joint ventures, looking to put an aircraft to go twice a week between Europe, Ghana, or Lagos. And then from there, down into southern Africa, fill up with perishables and take it back to Europe and try and to build in more cargo capacity.

“For the weekly twice service that we are planning, we would have to split the load depending on the yield, probably 50 percent from West Africa and 50 percent from Southern Africa, because there's not much coming out of West Africa to Southern Africa, either,” Jade explains.

With the new year coming just within a few weeks, in the first quarter of 2022, many businesses and investors in the aviation sector will be keenly observing the industry and its revival before drawing plans for the rest of the year.

“Almost everyone in the aviation business is saying, let's get through the first quarter of 2022 and see where we get. And I don't think it's going to stabilize, but then the rates might come down because I saw our rates have been driven by demand. There might be a little bit of stability, but the demand is going to be there without a doubt, it really is,” Jade adds.

“Through IAG Cargo’s extensive network, the route will allow perishables like green beans, mangos, melons, and fish to reach the US and the Asia Pacific as quickly as possible via Madrid.”

Freddie Overton, IAG Cargo

Nigeria- a complex aviation market
Nigeria’s aviation sector is an interesting one. If one looks at it then based on the inter-modal connection system in Nigeria, the roadways take about 80 percent and aviation is about the rest 20 percent. The aviation sector in Nigeria is an evolving industry, but there is room for investors and developments to follow suit.

However, navigating Nigeria is also difficult because of the complexities of regulations.

The penetration itself is not there because of a lot of factors, including the fact that the entry capital required for the industry is extremely high. For others, it's about not having the right capital to set up the airline or not using the proper aircraft or perhaps the market or demand is simply not there.

Experts talking about Nigeria and its developments, often mention infrastructure constraints. There is a need for a better mode of transport that will move products from Apapa, a local area in Lagos, to the airport. However, this facility is missing in Nigeria and industry players have to rely on trucking.

What 2022 looks like
Post pandemic, West Africa has geared up with new developments especially in the air cargo and aviation sector.

CAPA - Centre of Aviation has frequently reported on the several difficulties faced by many African governments in trying to attract foreign investors and operators to their airports. Many start-up companies are showing interest in the West African region. One such start-up is FlyWestAf that has proposed a low-cost carrier to be based at Banjul Yundum International Airport. The carrier aimed to commence services by May-2021, a revised launch date has not been advised. The carrier will initially operate to nine major destinations in West Africa, including Dakar, Bissau, Conakry, Freetown, Abidjan, Monrovia, Praia and Bamako with a fleet of five DHC-8-400s.

However, the tide has started to turn with a new airport in Ouagadougou, the capital of Burkina Faso in West Africa. It will be partially financed and managed by two European organisations, the Meridiam fund and Marseille Provence Airport, which collectively have the experience to make it work and have committed to introducing European standard ESG principles to their management.
Among other developments, the Kenyan tech-logistics start-up Sendy has completed an equity investment in Kamtar, a Francophone logistics platform to accelerate its next phase of business growth by launching operations in West Africa and expanding in the Eastern part.

“For its cross-continent expansion, Sendy is focusing on strategic greenfield and mergers and acquisitions investments with partners in the supply chain and logistics sector,” reads an official release from the company. Sendy will use its technology, expertise, and a broader range of services to bolster Kamtar's capabilities in Cote d'Ivoire and Senegal, where it currently operates, and to expand to other French-speaking West African countries by the end of 2022.

IAG Cargo, the cargo business division of International Airlines Group, has announced a new five-services-a-week direct route from Madrid to Dakar, Senegal as the company responds to increasing demand for the transportation of goods to West Africa.

The new route to Dakar, Senegal marks the first direct flight to the city for IAG Cargo. Flights along this route are running five times a week utilising an Iberia Airbus 330 and A350 with an approximate capacity of 20 and 30 tonnes per flight.

“This direct route will facilitate the imports of electronics and pharmaceuticals into Dakar. Through IAG Cargo’s extensive network the route will also allow perishables such as green beans, mangos, melons, and fish to reach the US and the Asia Pacific as quickly as possible via Madrid,” said Overton.

Aero Africa plans to open its own control tower in either Nigeria or Ghana.  “The plan for the next year is to have our own West Africa control tower with fairly skilled people in the region, to register Aero Africa in Ghana or Nigeria, and offer franchisee models in the neighbouring countries and handle West African operations from our control tower. This will give the countries, or rather smaller countries confidence that their franchiser is ground managing from the region itself and not the US or China. We are hoping for some great attractions and support for this business plan,” ended Jade.

All in all, the fortunes for the West African air cargo and aviation sector for 2022 looks optimistic, what with new businesses springing up, a return to stable air cargo movement and exciting industry developments aided by domestic and international investors. 

This article was originally published in Logistics Update Africa' November - December 2021 issue.