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WHO WILL BECOME THE PREMIER AIRLINE SERVING THE HORN?

By Mohamed Osman

Africa’s economic indicators are set to green. The International Monetary Fund is predicting gross domestic product growth of upwards of 6 percent for most of its countries in East Africa, lifting millions of consumers into the mid-income category.

Africa economyThe overwhelming majority of the fastest growing economies are currently in Africa with East Africa leading the region in terms of GDP. Air travel is influenced by business cycles, consumer confidence, and exogenous events. Over the long- term, cycles smooth out, and GDP, international trade, lower fares, and network service improvements become paramount. Air travel is expected to continue its historic relationship with GDP and it would be prudent not to ignore this fact. Turkish Airlines, Qatar Airways, Ethiopian Airlines and FlyDubai are only some of the Airlines whom chose not to ignore this fact and have opened new routes into Africa, including Djibouti, Hargeisa, Mogadishu, and Addis Ababa.

It is interesting to note that most of the aforementioned air routes were previously dominated by local carriers, such as Daallo, Juba, and African Express. These local carriers enjoyed a strong base in the Horn of Africa as they were able to provide safe and reliable air transport service, and in essence facilitate the growth of regional trade and tourism. Globally renowned carriers have recently realized the importance of opening access to destinations that are largely underserved and have great market potential. Places like Mogadishu, Hargeisa, and Djibouti have become a valued destination for business travelers and tourists alike. As more airlines enter the market and vie to become the leading air carrier in the Horn of Africa, it will only result in cheaper and more efficient service for travelers to the region. These globally renowned airlines aim to provide safe, reliable, and affordable air transport services on Africa’s lucrative intercontinental routes and thereby link them with key feeder markets in the Middle East, Europe, North America, Asia and other parts of the world. Falling oil prices will also contribute significantly to record breaking profits in 2015.

turkish airlinesPresident Erdogan of Turkey recently concluded his regional visit to the Horn of Africa in Mogadishu. He was welcomed by his counterpart in Mogadishu where they both attended the ribbon cutting ceremony of Aden Adde Mogadishu International Airport’s recently renovated world class airport terminal. The recently renovated airport has attracted the interest of several major airlines including but not limited to Ethiopian Airlines, Qatar Airways, and Emirates. Growing demand has also resulted in Turkish Airlines’ increased service from 4 flights per week to now daily flights to Mogadishu. Efforts are also underway of the construction of a world class international airport in Bosasso. Djibouti recently unveiled its plans to open two new world class airports in anticipation of growing global travel and trade. It is also important to note that FlyDubai recently announced its plans to commence service to Hargeisa in March 2015.

Qatar airwaysPresident Erdogan also visited Djibouti and Addis Ababa during his most recent visit. The region’s major airports will soon be crowded and increased competition will provide travelers with more options, lower fares, and increased efficiency.

The Horn of Africa is witnessing record economic activity especially in terms of capital intensive infrastructure projects. The building of dams, airports, and railways is a proven method and powerful contributor to economic growth. The aforementioned projects alone are bringing much needed Foreign Direct Investment into the Region and along with it increased business travel. There is also a recent surging growth in returning expats whom wish to exploit the vast and untapped investment opportunities available in the Region. Business in the Region is booming across all sectors!

ethioBusiness travel is not alone in its rapid ascent. Tourism has also picked up quite considerably. As fast growth rates and rising disposable incomes in the Chinese and Indian economies foster the creation of a growing Asian middle class, the opportunity for Africa to attract more tourists from that part of the world has become greater. Indeed, China’s government formally encourages tourism in Africa. The government has approved 16 African countries as outbound destination for Chinese tourists, including Ethiopia and Kenya. This pushed the number of Africa’s tourists to 210,000 in 2010 a 100 percent increase over 2009, according to Chinese government figures. Although recent figures are hard to find, the number of unofficial Chinese tourists to the continent reached one million in 2013. Many expats along with their families have also returned to assist in the empowerment of their people and transform their despair into hope.

As the region continues in its natural progression to develop and move forward in pursuit of its true potential, one thing is for sure one man’s challenge is another man’s opportunity and hence Kofi Annan’s belief that Africa’s profitability is one of the best kept secrets in today’s world economy. I think it is fair to say that it is no longer a secret!

Mohamed Osman, MBA
Email:[email protected]
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Mohamed Osman is WardheerNews Media Group, Marketing and Business Partnership manager.


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