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Thu, Jul 19, 2012

New Analysis Explores Aviation Growth In Africa

OAG: Capacity Has Grown, But Not Investment In Infrastructure

Africa airport infrastructure development and investment must be improved for the continent's Aviation industry to continue to grow, according to OAG's latest Aviation Market Insight Report released Monday.

Analysis from OAG reveals that while airline capacity has grown recently within Africa broadly in line with GDP increases, at 5% annually, the expansion has not been matched by investment within the airport infrastructure. The smaller airports across the region are still struggling with infrastructure challenges combined, in some cases, with general poor facilities. And as widely reported in the world's media, most States lack the ability to accommodate transit passengers between airports. If the economies of these countries are to fully realise their potential and aspired growth plans, then the airport infrastructure will have to be addressed and more progress made.

Where infrastructure investments have been made in Africa, the Aviation industry has flourished the report maintains. Nowhere is this better illustrated than in Nigeria, Kenya and of course South Africa. In 2011, South African Airways posted revenues of almost $3 billion, up by 2% compared to 2010, while Kenya Airways, who joined the Skyteam Alliance in 2010, reported year-on-year revenue growth of 21.3% up to $988 million.

No doubt due to its huge geographic expanse, the continent has traditionally been overlooked for more established destinations by investors. Is that all set to change?

International Sales Director (Europe & Africa) at OAG, Mory Camara, believes it is, pointing to China's increasing influence within the region, "China looks to be taking a long-term investment approach in Africa, with the Strategic Mineral Reserve and the China-Africa Development Fund two examples of China's developing relationships in Africa. As the economic benefits of these trade arrangements are felt on the continent, the Aviation industry and the demand for air travel will increase as it has done in other countries as they were developing". The optimism for the future though is tempered by the basic fact that the infrastructure needs to be developed in line with the rate of development of the carriers. Only by bringing the governments, airlines and investors together can Africa really start to develop its potential.

FMI: www.oag.com

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