FROM MAGAZINE : African airports seek business transformation and sustainability

FROM MAGAZINE : African airports seek business transformation and sustainability

O R Tambo International Airport in Johannesburg is Africa’s biggest and busiest airport handling about 21 million passengers and more than half a million tonne of cargo annually.

Face-off between airports and airlines are usual at aviation industry meetings in Africa and it was not different at the recent ACI’s African regional conference either. Roy Ezze reports from Lagos on the fundamental questions as to the place of cooperation in the future of airports and airlines development in Africa.

Efforts to enable African airports run as sustainable and profitable businesses have been further intensified, as the 59th Airports Council International’s (ACI’s) 2018 Africa Regional Conference held in Lagos, Nigeria, recently sought workable ways to improve the management and revenue generation of African airports. The ACI-Africa conference drew over 280 participants from 47 countries and several international organizations.

While the vexed issue of the usual face-off between airports and airlines took centre-stage during the event, it notably raises fundamental questions as to the place of cooperation in the future of airports and airlines development in Africa. Airports representatives argue that airlines should focus on improving their services and address other huge costs facing them, rather than complain over airport charges. Khaled Chelly, CEO, Tunisian Civil Aviation and Airport Authority (OACA), and Angela Gittens, Director General of ACI World, posit that airport charges are much less than other costs airlines incur such as fuel, poor management, government taxes, etc. Gittens states that airport charges are justified means of recouping the spending on airport facilities.

Conversely, airlines stress that huge airport charges and taxes pose challenges to sustainability of African airlines. Sidy Gueye, Regional Director Africa – Airport, Passenger, Cargo and Security (APCS) for the International Air Transport Association (IATA), adds that airlines are not always carried along before these decisions on taxes and that have significant impact on their operations are taken by airports and governments.

In this regard also, a fundamental issue noted by Mam Sait Jallow, the Regional Director for West and Central Africa for the International Civil Aviation Organization (ICAO), is that African governments and airports do not observe ICAO guidelines before imposing taxes, charges and fees in the aviation industry. This calls to question the role of the civil aviation authorities in Africa as regulators. In several instances, these regulators are also owners and managers of the airports.

Challenge of management and infrastructure
Furthermore, Gittens frowns at the disposition of African airports and airlines to look up to governments for support and solution to their challenges in their operations, rather than becoming more innovative and running as businesses. And this change of leadership mindset among African airports is vital for the improved operations and expansion of non-aeronautical revenue.

ICAO Council President, Olumuyiwa Benard Aliu highlights that the continent’s rapidly-expanding air traffic can only be sustained and optimized through the continued development and modernization of local aviation infrastructure, particularly at airports.

“The industry here generates very positive impacts on tourism and trade, directly and indirectly supporting 6.8 million jobs and generating 72.5 billion dollars in Gross Domestic Product (GDP),” he says of Africa. “But due to the more recent and effective focus on air transport liberalization, many African hub airports are now expected to exceed their capacity by 2020.”

Aliu says more attention must continue to be paid to the airside safety priorities at Africa’s airports, “including international airport perimeter fencing, taxiway and runway safety, effective fire services, and better wildlife management.”

The Nigerian government expresses commitment to support airports and aviation infrastructure improvement in Nigeria. Boss Gida Mustapha, the Secretary to the Government of the Federation of Nigeria, who declared the ACI Conference open says airports are essential to Nigeria’s development objectives. Nigeria is however criticised for utilising its resources to upgrade its airports and aviation infrastructure as seen in other big states like South Africa and Ethiopia where the air cargo facilities, for instance, are exemplary.

Saleh Dunoma, President ACI Africa, who is also the Managing Director of the Federal Airports Authority of Nigeria (FAAN), underlines the opportunities for investments in Nigeria. He says Nigeria looks to the certification of all its international airports with support from ACI. More so, Senator Hadi Sirika, Nigeria’s Minister of State for Aviation has a target of turning around aviation infrastructure in Nigeria to make the country a preferred hub. Nigeria has remodeled 22 of its airports and built new terminals in five of its international airports, but yet to develop an airport terminal with good transit facilities.

In Mauritius, however, the airport management is exploring ways to convert local products and unique services to attract tourists and other visitors thereby improving non-aeronautical revenue. Romesh Bhoyroo, CEO of Airports of Mauritius Ltd (AML), says the increasing competition among airports requires airports to look inwards to develop unique services to attract visitors.
There are expectations that on-going efforts in Nigeria and other African states would convert the huge potentials for businesses at the airports to concrete benefits, especially non-aeronautical business opportunities.

While several African states have announced their intent to establish airport cities, Ghana has recently actualised its dream in this regard, and plans for the second phase of its airport city projects. John Dekyem Attafuah, Managing Director, Ghana Airports Company Ltd. says Ghana has relied on partnerships to achieve the first phase of its airport city which is already yielding remarkable benefits. He says air cargo development has the potential for reducing revenue loss at Ghana airports.

Innovation and Technology
Although Ali Tounsi, Secretary General of ACI-Africa, says ACI is intensifying support in terms of training of African airports personnel, lack of focus on the needs of the customer is still one of the challenges facing African airports. However, few airports management companies like Airport Company South Africa (ACSA) have improved customer management and satisfaction which is high on the priority list. Bongani Maseko, CEO of ACSA, looks to increasing new sources of revenue for ACSA. As several African airports embark on airport development projects, the adoption of technology to enhance facilitation and customer experience, etc. are essential for overall improvement of African airports. The use of improved technology is the future for all aspects of African airports.

Though several African airports have potentials to increase revenue from duty free shops, new regulation especially an expected WHO Protocol to eliminate illicit trade on tobacco products could limit revenue from such products. The association of duty free shops calls for restraint, noting that duty free sales “are a secure, legitimate retail channel,” and that “immediate action is needed to protect duty free from this very real global threat.

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