Airbus sees big growth in Africa's fleet demand
Wed Jul 13, 2005
By David Mageria
NAIROBI, July 13 (Reuters) - Ageing fleets and rising tourism are driving demand for aircraft in Africa, planemaker Airbus said on Wednesday, adding the market would need 640 new planes worth about $60 billion in the next two decades.
"Africa is set to experience unprecedented growth in the air transport sector," Hadi Akoum, vice-president for Africa at Airbus, told reporters here.
"Demand will be driven by the increasing trade and tourism ties between Africa and Europe, China, the Middle East and North America."
African air traffic is expected to grow by an average 4.7 percent in the next 20 years, in line with projected economic growth of 5 percent for the continent, according to Airbus' forecasts.
Rival planemaker Boeing Co. (BA.N: Quote, Profile, Research) has forecast African demand at 425 planes worth some $34 billion over the same period.
Airbus' Akoum said African airlines faced stiff competition from European airlines, rising global fuel prices and heavy spending to operate and maintain their old and inefficient fleets.
Most aircraft in Africa were more than 20 years old and needed to be replaced if the airlines were to survive and benefit from anticipated growth in the travel industry, he said.
"Airlines should not be afraid (to buy) because at the end of the day it will cost them less than operating old airplanes with high fuel consumption and costing them much," he said.
Out of the 280 commercial airliners operating in Saharan and sub-Saharan Africa, only 80 were new, Akoum said, without elaborating.
He said Kenya Airways (KQNA.NR: Quote, Profile, Research), Air Mauritius (AIMK.MZ: Quote, Profile, Research) Ethiopian Airlines [ETHA.UL] and South African Airways [SAA.UL] were the few companies making good profits because they operated new generation aircraft.
Many small African airlines would find it difficult to raise funds for purchasing new aircraft, he said, but added that manufacturers could help arrange financing.
Akoum said most planes in Africa were supplied by Boeing and bought 20 to 25 years ago, but that Airbus held 56 percent of the market in planes sold since 2001.
© Reuters 2005.