Government-owned South African Airways appears to be setting its sights on Ghana as the most likely location for a secondary hub as it focuses on West Africa to build a regional air transport center, TheOxfordGroup reports.
Underserved in terms of short-haul connections, West Africa has potential in the form of growing passenger demand and a rise in trade integration.
“We’re now focusing on Ghana as we operate on the Johannesburg-Accra sector,” SAA spokesman Tlali Tlali told Bloomberg News in June.
West Africa has a population of more than 300 million people and only limited intra-regional links in a region that include some of Africa’s top frontier markets such as Côte d’Ivoire, Ghana, and Nigeria.
A handful of airlines – including Air Cote d’Ivoire, Senegal Airlines, Togo’s Asky, and Nigeria’s Aero Contractors and Arik Air – already fly between West Africa’s larger airports.
But flight frequency and prices on those airlines are constrained by ageing infrastructure, high landing fees, burdensome regulations, and limited maintenance facilities, TheOxfordGroup reports.
SAA has a strong reputation as a pan-African carrier, flying to nearly half the African Union countries. It has the most extensive network in Africa, SAA spokesman Tlali Tlali told TheNational. A partnership with Etihad has announced a year ago. Before that, about 75 percent of SAA’s international seat capacity was allocated to the African market, including about 47 percent in Southern Africa.
SAA CEO Nico Bezuidenhout has the goal of raising revenue from Africa by 30 percent before the end of 2016, TheNational reports.
Accra is better positioned geographically for a larger portion of the continent than Johannesburg, SAA’s current hub, according to TheNational.
But SAA is having its own issues with an ageing fleet and increased maintenance bills while competitors in Ethiopia and Kenya use modern aircraft that are much cheaper to operate.
These are not good times for SAA, TheNational reports. It’s struggling to meet costs and is forced to rely on its only shareholder – the government – for help.
The government came through with additional support in October, guaranteeing SAA $598 million that will allow the airline to add to O.R. Tambo International Airport — its main hub in Johannesburg — before the end of 2016, TheOxfordGroup reports.
Before considering a hub in Accra as a regional base, SAA considered Dakar – which SAA already uses as a stop for direct flights to the U.S. – as a potential West Africa base. That turned out not to be economically feasible, Tlali said.
In May 2013, Ghanaian Minister of Transport, Dzifa Attivor, said the government had acquired 6,475 hectares (16,000 acres) in the Ningo-Prampram area of greater Accra for a new, yet-to-be-named international airport. Feasibility studies are underway. A budget has not yet been released. Construction would take a minimum eight years to complete, given the lack of existing infrastructure such as utility connections to the area, TheOxfordGroup reports.
With 24 million people, Ghana has seen robust growth rates in recent years and attracted record foreign direct investments since oil was discovered in 2007. Accra’s stable security and relatively low costs work in its favor. The country has three domestic carriers – Africa World Airlines, Antrack and Starbow. Fly540 recently suspended operations.
Traffic at Accra’s Kotoka International Airport grew from 1.6 million in 2011 to 1.7 million in 2012, TheOxfordGroup reports. Domestic volumes rose from 200,000 to 500,000 in the same period. Growth forecasts suggest it could see as many as 10 million passengers per year by 2024.
Source: Dana Sanchez