10/03/10, 15:13:24 EST

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African airlines to look for capital market funds

bdafrica.com

The potential of capital markets to fund Africa’s aviation industry will come up for discussion at a major conference that opens in Nairobi this morning.

The National flag carrier Kenya Airways, one of the dominant airlines in Africa is listed at the NSE. The airline was privatised in 1996 at a time when it was turning in losses but its fortunes has since turned around making it one of the profitable airliners in the continent.

Fleet owners such as Kenya Airways and Fly540 will come face to face with aircraft manufacturers, financiers, insurers and leasers at the three day conference aimed at finding solutions to aviation problems in Africa.

The 16th Annual African Aviation Finance conference on Air Finance for Africa comes at time when Africa’s aviation industry is expanding at a steady rate with new entrants such as Air Uganda testing the dominance of Kenya’s national flag carrier Kenya Airways.

The Ugandan airline started flights on Thursday to Tanzania, South Sudan and Nairobi —opening up competition on routes long monopolized by Kenya Airways.

Domestic operator Fly540 has also been licensed to operate international flights across the east African region. Lonrho-the owners of budget airliner have started replicating the success in Angola.

But due to inadequate mismanagement and fleet, African airlines are struggling to stamp their authority in the international aviation map. Some African airlines have been banned from flying into Europe.

The European Union has banned all airlines from DRC, Equatorial Guinea, Sierra Leone, Swaziland from flying into any European airports. Angola, Sudan and Rwanda have had some of their planes blacklisted in Europe.

The International Air Transport Association (IATA) says Africa has only 4.5 per cent of total world air traffic, but 25 per cent of the total accidents in 2004 occurred in Africa.

IATA has singled out Democratic Republic of Congo, Sierra Leone, Equatorial Guinea and Swaziland airports as unsafe for flying. The countries are accused of failing to implement the most basic international safety standards when certifying airplanes for commercial use.

The Nairobi conference comes at a time when African airlines are grappling with the problem of modernizing their fleet in tune with the fast changing aviation industry.

According to Fadugba who also publishes the African Aviation magazine, African aviation companies must modernize their fleet if they are to counter the entry of flights from the Middle East and Europe

Most African airlines, including Kenya Airways, have placed new orders with aircraft leasers and manufacturers signaling their intention to bring their fleet up to standard.

 Printable Version  | published Nov 18, 2007