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Due to chronic poverty and political instability, Africa was considered as the Dark
Continent and was ignored for ages by most global investors.
The airline industry -like other sectors- was part of this ignorance by global economic players. In the past global investors showed no interest to invest in the transport sector in Africa. Few international airlines used to fly to Africa from North America and Europe. The African airline industry, which is closely related to economic development, lagged far behind the rest of the world.
However, the situation in Africa has been changing throughout the past years. Relatively, there is now better peace and stability in the continent. The economic situation is improving significantly. Today, a number of African countries are registering a speedy economic growth. More African countries are joining the group of oil exporting countries and new mining fields are being discovered. Even those non-oil producing countries like Ethiopia, Uganda and Ghana are registering remarkable economic growth.
With 728 registered aircraft, Africa accounts for about three percent of world aircraft departures. Today, the airline industry in Africa accounts for about 470,000 jobs and contributes some 11,3 billion dollars to the continent GDP stated by Access Capital magazine. According to ICAO, Africas annual passenger traffic is estimated at 40 million, roughly 1,8 percent of world passenger traffic.
The traffic growth rate on the continent is projected by various studies to be higher than the world average for the foreseeable future. IATA forecasts that over the next three years, passenger traffic to and from the continent will have an annual average growth rate of 6,5 percent, making it among the fastest I the world.
Also Boeing forecast that Africa will need 710 new aircraft worth about 80 billion dollars in 20 years period to 2029. Airbus has more bullish forecast of 1270 new aircraft deliveries to African carriers. This growth prospects for the African continent have not gone unnoticed by carriers from outside the continent. Currently, non-African carriers dominate the air transport to and from the African continent, carrying 75 percent of passenger traffic.
In the coming years the African continent can be one of the leaders in the aviation industry.
Mr. Arun Panchariya is specialising in cross border transaction between Asia, Europe and the US
