Like many global companies in a variety of industries, Boeing is looking to strengthen its foothold in the African air travel market in order to be able to benefit from the continent’s long-term economic potential.
Several characteristics make Africa especially appealing for aviation. The continent has been and is expected to continue experiencing strong economic growth due to international demand for commodities, which is likely to increase demand for long-haul travel to and from the continent.
In fact, this phenomenon is already starting to occur. Air travel capacity from Africa to other emerging markets as well as North America has grown by 5% since 2010. In addition, traffic within Africa and from Africa to other emerging markets is surpassing traffic from Africa to Europe, which used to represent the majority 20 years ago but will soon represent 40% of total air traffic in Africa.
In addition, Africa’s recent economic progress has resulted in a rapidly expanding middle class. For airlines, this represents a vast and untapped market of consumers who are now starting to acquire sufficient purchasing power to be able to start travelling by flight.
Indeed, it is estimated that Africa’s middle class will expand by 700 million people over the next few decades, representing an enormous and new set of potential air travel customers.
These facts represent an opportunity for aircraft manufacturers such as Boeing. The types of air travel conducted in Africa are becoming more diverse, with increases in flights within Africa and from Africa to new international destinations, and the fleets of airlines operating in Africa will need to change to accommodate these developments.
Boeing estimates that the African aircraft market is worth $120 billion and expects that the African fleet of planes will number 1,300 in 2031, up from 670 in 2011. The vast majority of the 900 new planes will be smaller, single-aisle aircraft, although larger, twin-aisle aircraft will account for half of the value of new plane deliveries.
All of this growth in the African air travel market is highly dependent on government policy related to improving air travel infrastructure over the continent. Investment in the African air travel market comes with some risks and returns are likely to take a long time to materialize, but given the economic potential of the world’s second most populous continent, it seems that it will be worth it.
– Caroline Poterio Martinez