Long-Term Market
Economic development supports air travel growth
Political unrest in the north slowed African economic growth to 1 percent in 2011--well below the long-term average. Yet, as the second largest and most populous continent after Asia, Africa's long-term economic potential is strong. Over the next two decades, Africa's economy is forecast to grow faster than the world average, driven largely by demand for natural resources, including oil and metals, from both emerging and mature economies. These connections will foster demand for long-haul travel.
A growing middle class and increased urbanization also contribute to the continent's commercial aviation potential. The African Development Bank projects that Africa's middle class will grow by more than 700 million people over the next several decades. United Nations data shows that urban dwellers were about 15 percent of Africa's population in 1950 and are expected to be 50 percent by 2030--a trajectory similar to that of Asia.
Air transport expanding and increasingly competitive
North Africa's political upheaval has dampened air travel demand, particularly to and from Europe, where capacity remains below 2010 levels. Capacity to other emerging markets and North America, however, has risen 5 percent since 2010, indicating potential directions for growth. Rapid growth of traffic within Africa and with other emerging markets is overtaking Europe traffic, which constituted a 60 percent share of Africa's total traffic 20 years ago, but will fall to around 40 percent by the end of the forecast period.
Economic links with other emerging markets also bring increased competition. Africa presents growth opportunities to airlines from other regions where demand growth is slower. Airlines in other emerging markets may take advantage of their network connections to serve African destinations. Within Africa, national airlines are expanding service to other African countries. Yet ample service opportunities remain, as relatively few airlines compete for intra-regional markets.
Aviation and economic development projections depend on government policy support for transport infrastructure. The flexibility of aviation networks and the relatively low cost per network kilometer make aviation infrastructure investment very attractive compared to investment in other modes.
Fleet development
Africa is forecast to require 900 new airplanes over the next 20 years, doubling its fleet. Approximately 70 percent of forecast deliveries will support growth. Single-aisle airplanes will account for the largest share of deliveries, while twin-aisle airplanes will account for half of the value of deliveries to Africa.
