NAIROBI - Africa’s top airlines have embarked on aggressive regional routes expansion to protect revenues that have come under immense pressure since the onset of the global financial crisis —renewing a long standing battle for control of the continent’s air space.
In recent months, leading operators Kenya Airways, Ethiopian Airlines and South Africa Airlines (SAA) have been spreading their footprints across the continent, aiming to tap enough revenues to plug the gaping holes left by low passenger volumes in the traditionally profitable long haul flights to Europe and the Far East.
Kenya Airways is leading the pack with 36 African routes that now account for more than half of its annual revenues.
Following closely behind is Ethiopian Airlines which flies to 34 destinations and South African Airlines which plies 30 destinations on the continent.
In the last financial year ended in June 2009, increased footprint in Africa saw Kenya Airways rake in Sh2.65 billion in operating profits from Africa out of a total Sh4 billion from all routes combined.
Europe’s contribution to the airlines earnings during the same period declined by 43 per cent to stand at Sh522 million unravelling the impact of the global recession on profitability of the route.
This shift in the profitability of routes has positioned Africa as the new growth frontier sparking a battle that is not only being fought through increased frequency in the various regional routes, but also through aggressive fleet build-up to meet rising demand.
Increase in passenger volumes on regional routes is supported by the fact that Africa has defied global trends to attract investment and realize growth.
Though initially dismissed as a risky undertaking by many operators, increased presence in African routes has paid off for early starters like Kenya Airways, helping them to grow revenues at a time when their rivals have had to reduce capacity and introduce special charges to remain in business.
Africa remains a key focus for the airlines as the aviation sector grapples with depressed international passenger numbers following effects of the credit crunch that has seen traveller numbers drop by as much as 30 per cent.