African Air Transport Management: Strategic Analysis of African Aviation Market

This book provides a comprehensive overview of the African air transport market from a strategic management perspective. Drawing on well-grounded theories, research applications and real-world case studies, it examines competition dynamics, interconnectivity, the growth of low-cost carriers, and demand patterns in air transport for both passenger and cargo traffic. It also presents an expert analysis on the introduction of the Single African Air Transport Market (SAATM), made possible by the liberalization of the air transport market, from a regulatory perspective. Based on the results of the analysis, the book evaluates both the benefits and limitations of an open skies agreement. Furthermore, it shed lights on the challenges and complexities of African public infrastructure investments and airport financing, discusses the impact of COVID-19, and provides strategic recommendations for airlines. The book is aimed at professionals in aviation and airline industries and students interested in the African air transport market. Acknowledgements Contents About the Author Abbreviations Chapter 1: The Context of the Airline Industry: An African Market Perspective Introduction Situation of Air Transport Market (i.e. Demand and Airlines) and Recent Trends (i.e. Capacity and Demand) Case Study: Ethiopian Airlines Brief Background Ethiopian Airline Operations Strategic Partnerships Potentials and Challenges of the Air Transport Market in Africa African Aviation Connectivity and Infrastructure Development Challenges Obstacles and Dilemmas Intra-Africa Connectivity Measuring Airline Performance: African Markets Conceptualizing Airline Performance Framework Effects of COVID-19 on African Airlines Performance Conclusion References Chapter 2: Air Transport Regulation: A Perspective on Africa ́s Regulatory Framework Introduction North American and European Union Air Transport Liberalization: Historical Perspective Yamoussoukro Decision The Regulatory Framework African Aviation: Internal Versus External Pressures Effects of Liberalization South Africa Kenya Ethiopia Nigeria East African Community Demand and Supply Patterns of Air Travel African Aviation Cost Structure Fuel Costs Financing, Insurance and Leasing Distribution Maintenance and Ground Handling Services Labour Safety Single African Air Transport Market (SAATM) Alignments in Regional Economic Groups in Africa Northern and Western Africa AMU: The Arab Maghreb Union The League of Arab States Arab League open Skies ́ agreement ECOWAS: Economic Community of West African States West African Economic and Monetary Union The Banjul Accord Group CEMAC: Central African Economic and Monetary Community The Air Transport program of the CEMAC states Southern and East Africa COMESA: The Common Market for Eastern and Southern Africa SADC: The Southern African Development Community The East African Community Regional Economic Community: The Path Ahead Measures to be Explored for the Aviation Sector References Chapter 3: Emergence of the Low-Cost Carrier Model in Africa Introduction The Low-Cost Carrier Model Global Market Leaders Low-Cost Carriers in Africa and the Middle East LCC Growth in Africa Low-Cost Strategy Structural Challenges to the Low-Cost Carrier Model in Africa East African Air Transport Market GDP Development Foreign Trade and Investment Demand and Supply Patterns Infrastructure Financing and Aircraft Leasing Low-Cost Carrier Aircraft Market Distribution Maintenance and Ground Handling Services Labour Concept of Sustainability Economic Sustainability Low-Cost Carrier Capacity Conclusion References Chapter 4: Demand Patterns in Air Passenger Transportation: Application of Gravity Model Introduction Econometric Modelling Spatial Econometrics The Spatial Econometric Approach to Estimating Panel Data Model from the Airline Industry Gravity Model for Forecasting Air Transport Market Potential Estimating Potential Market Demand Using Gravity Model Dependent Variable Explanatory Variables Population Airfare Model The Demand Study Survey Demand Analysis: Gravity Model Application of Fare Cut to Demand Forecast The Potential for Low-Cost Operations from a Theoretical Perspective Demand Analysis: Survey Analysis Analysis of Travel Characteristics Mode of Transportation and Importance of Certain Trip Factors Air Transportation Usage Trip Costs Interim Conclusion Research Study Example Consumer Surplus Gravity Model: Detailed Description of the Model Intervening (InterveningAB) Variables Pertaining to the Bilateral Agreements: Bilateral Factors (0, 1) AB Using the Model to Estimate the Traffic Impacts of Liberalization Economic Impact Parameters Indicative Findings Frequency Model Results from the Econometric Analysis Conclusion References Chapter 5: Africa ́s Air Transport Infrastructure: Challenges, Complexities and Opportunities Airport Operations African Civil Aviation Commission Investment and Growth in Air Transport Changing African Aviation: What Lays Ahead of Africa ́s Skies? African Airport Infrastructure Challenges and Complexities Private Sector Engagement in Airport Infrastructure Regulatory Environmental Factors Project Parties The Theories of Resources and Capabilities: Strategic Management Perspective Resource-Based View Core Competencies Dynamic Capabilities The Impact of Tourism on Promoting Public-Private Partnerships Case Study: Ollombo Sassou N ́Guesso International Airport Air Traffic Control The Role of the African Development Bank in Airport Infrastructure Financing COMESA Airspace Integration Project Location The Financing Gap Leveraging Private Sector Engagement to Foster Airport Infrastructure Improvement Airport Privatization Models The Impact of COVID-19 on Airports Herfindahl Index Conclusion References Chapter 6: Tourism Development in Sub-Sahara Africa and Impact on Regional Airline Business Models Definitions of Tourism Types of Tourism Foreign Tourism Domestic Tourism The Value of Tourism Kenya Tourism Engine for Sustainable Economic Development Tourism as a Generator of Employment The Impact of Tourism on Infrastructure Development Tourism Stimulates Socio-Cultural Heritage Conservation Empowering Women, Young People and Marginalized Populations Tourism in the Southern African Development Community Key Characteristics of the Tourism Sector in Africa The Role of Aviation in Tourism Development Challenges in Aviation Industry Air Transport and Tourist Flows Growth and Change in the Global Airline Industry International Framework for Aviation Regulation Paris Convention Convention on International Civil Aviation (Chicago Convention) Bermuda Type Agreements Regional Tourism Development Tourism ́s Contribution to Local and Regional Development Regional Tourism Policies Importance of Aviation Sector and Tourism Industry Economic Benefits of Aviation Social Benefits Strategic and Operational Measures to Be Taken by Airline Carriers to Foster Development of Tourism in Africa Strategic Controlling Operational Controlling Airline and Regional Tourism Policies Impact of COVID-19 on International Tourism and Air Transport COVID-19 Impact on Air Cargo Capacity Global Perspective: Impact of COVID-19 Case Study: South African Airways (SAA) Brief History Fleet Structure Prime Period The Outlook for the Aviation Sector Overview Environmental Policies in Aviation Aviation Industry Adaption to Climate Change Conclusion References