What do we know about Africa’s low-cost carriers?
Almost every African country has a national full-service carrier, which is carefully protected. But the same cannot be said about the continent’s low-cost carrier (LCC) market.
Low-cost carriers are a relatively recent addition to the air travel market in Africa. In comparison to the region’s well-established full-service carriers (FSC), including Ethiopian Airlines, EgyptAir and Kenya Airways, its budget airlines were all launched in the early 2000s.
What do we know about Africa’s LCC market today? What are the main challenges in running a budget airline in Africa? And why have so many failed? Here, AeroTime investigates the LCC market to assess the situation.
History of low-cost carriers in Africa
The LCC business model requires a liberalized market to be able to operate flexibly and at low cost. So the reason why African LCCs were late starters was the absence of air service liberalization and a lack of deregulated regulatory frameworks.
After independence, the continent’s governments established their own flag carriers, which have been supported and protected from competition and have prevented new companies, including low-cost carriers, from joining the air travel market.
“The expansion and improvement of air transport on the continent has been hampered by a restrictive and protectionist intra-African regulatory regime,” according to the International Air Transport Association’s (IATA) report.
Thing started to change after 1999 when the Yamoussoukro Decision (YD) was set in motion to liberalize African air services. Previously, they had operated under bilateral agreements on a country-by-country basis.
The implementation of YD, and later the Single African Air Transport Market (SAATM), have alleviated restrictions on airspace and lessened tariffs and red tape. However, while some African states have relaxed bilateral agreements to allow more flights and frequencies, full liberalization was, and still is, far from being a reality.
“Many African countries restrict their air service markets to protect the share held by state-owned air carriers,” independent aviation analyst Phuthego Mojapele told AeroTime.
Despite the slow process, low-cost airlines have been launched in in Africa. Since the early 2000s, several airline ventures have entered the market but almost half of them have not succeeded.
The LCC sector is still dominated by South African carriers
In 2020, there were only around 10 LCCs based in Africa with scheduled traffic, IATA confirmed to AeroTime in a statement. It is worth noting that this number may exclude LCCs that operate charter flights.
To this day, most of the low-cost carriers in Africa remain relatively small. The biggest players are concentrated in southern and northern Africa, where the network is more complex and accessible.
However, most of Africa’s low-cost carriers are South African. The country is home to Kulula.com, Mango Airlines, Fastjet, FlySafair, and market newcomer Lift.
According to the Centre for Aviation (CAPA), the LCC penetration rate in South Africa was 60% in 2019, while the penetration rate for the overall intra-Africa market was approximately 13%.
The country is home to Africa’s first budget airline, Kulula.com, which has been operating for 20 years. The airline currently serves six cities across South Africa: Cape Town, Laseria, East London, Johannesburg, Durbs, and George.
The airline boasts one of the youngest and largest fleets across the continent. It has a total of eight Boeing 737 aircraft in its fleet with an average age of 13.2 years, according to Planespotters.net.
Africa’s LCC fleet remains modest
Only one budget airline has a fleet of more than 20 aircraft. FlySafair is a relatively young low-cost carrier, and is one of the fastest growing LCCs in Africa. The Johannesburg-based airline was established in 2014 and became profitable in its second year of operation.
According to Planespotters.net, the airline’s fleet consists of 21 Boeing 737 aircraft, namely 15 Boeing 737-800s and six 737-400s. The average aircraft age currently stands at 22.3 years.
Other African budget airlines, such as Kulula.com, FlyEgypt, Jambojet, AirArabia Maroc, and Fly540, have less than 10 aircraft in their respective fleets, according to Planespotters.net data.
Meanwhile, Fastjet, AirArabia Egypt, Mango Airlines, Lift, and Green Africa Airways have less than six aircraft in their respective fleets.
It is worth noting that there are no wide-body aircraft operated by LCCs in Africa. Africa’s LCCs usually operate popular narrow-body planes - the Airbus A320 or Boeing 737. But there are also budget airlines which operate Embraer or ATR 42/72 turboprop jets.
Obstacles in setting up LCCs in Africa
Africa may seem a like good place to set up the low-cost carrier due to its growing aviation market and unexploited growth opportunities.
But many LCCs have failed, including Velvet Sky, 1Time and Air Leisure. A lack of a regulatory framework and the absence of a liberalized market made it difficult for them to survive. As a result, regional and trans-continental air services are, for the most part, uncompetitive, inefficient and expensive.
Therefore, Africa is one of the last frontiers in the LCC sector with its poor infrastructure, logistics, maintenance challenges, and inadequate skilled human resources — vital components for the LCC business model.
"The challenge with low-cost carriers in Africa is that they don't seem to be really low-cost carriers despite enjoying privileges like no free in-flight meal, charges for carry-on baggage, and non-flexible tickets, which are often non-exchangeable and non-refundable," the Tanzania Civil Aviation Authority (TCAA) director General Hamza Johari told AllAfrica.
According to the ICAO 2013 publication, African airport charges per passenger have been much higher than in other regions across the globe.
By comparison, the airport in the United Kingdom with the highest charges is almost two times cheaper than Africa’s highest charged airport, making the continent one of the most expensive places to operate an airline.
"This [LCC model] doesn't work in Africa due to the operating environment and if it did, every airline would opt for it," Air Tanzania CEO Ladislaus Matindi told AllAfrica, adding that operating costs need to be minimized as much as possible
In an emailed statement to AeroTime, Mojapele said that intra-African routes are underserved because most countries have yet to fully implement the Yamoussoukro Decision, which aims to unify skies in Africa.
“There’s a good indication that the continent remains in desperate need of improved and affordable aviation connectivity if you were to compare Africa with Asia, Europe, or North America,” Mojapele said.
So it’s no surprise that, since the beginning of the LCC era in Africa, only three airlines have operated international low-cost services within Africa: Fly540, Mango Airlines and Fastjet. In 2021, the low-cost carrier FlySafair joined the team of airlines serving international destinations in Africa.
“In just about seven years we’ve managed to gain a fairly strong footprint in the South African domestic market. Finally breaking beyond local borders is an exciting milestone for us,” CEO of FlySafair, Elmar Conradie, announced in a press statement dated September 2021.
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