Industry Wakes Up To Rising Bizav Demand In Africa
Visitors to the Africa Aerospace & Defence show (AAD 2012), held in September at South Africa’s Waterkloof Air Force Base near Pretoria, might have been excused for thinking that they had arrived at a business aviation convention. While the exhibition halls groaned under the weight of armored vehicles, the outside static aircraft display was dominated by an impressive array of corporate and private jets.
Ranging in size from small personal (Eclipse 500) to bizliner (Airbus ACJ319), business aviation at AAD was much larger than at previous shows. Of the major OEMs, only Boeing was absent from the static display, although the Presidential BBJ2 of the South African Air Force’s No. 21 Squadron was much in evidence as it operated from its home base.
Why has the AAD show become so attractive to purveyors of business aviation? The answer lies in the fact that while many have been focusing attention on anticipated growth in Asia, the Middle East and Russia, Africa has quietly emerged as a significant source of new demand that remains relatively open to all suppliers.
Africa’s rise as a corporate jet market was reflected earlier this year by the establishment of the African Business Aviation Association (AfBAA). Launched at the EBACE show in May, the AfBAA’s remit is to raise the profile of business aviation in the continent while promoting the benefits it can bring to governments, corporations and to civil aviation authorities. At the same time, it is working with those authorities to improve the conditions that prevail in the continent, which are not as conducive to bizav operations as in most other parts of the world.
Approximately 420 business jets are currently based in Africa and some 40 percent of them are more than 10 years old. Many of these existing aircraft will need replacing in the coming years, while economic growth in the African market should swell the overall business jet fleet.
Embraer, for example, foresees a large market on the continent over the next 10 years, suggesting that approximately 250 aircraft worth $6.3 billion will be delivered. If that forecast is correct, it is no wonder that manufacturers are taking a major interest in Africa.
Nature of the Business
For now, business aviation in Africa is driven largely by the exploitation of natural resources. Mining and oil production companies account for a large proportion of not only the business jet fleet but also large numbers of more prosaic aircraft, including turboprops such as the Cessna Grand Caravan and Hawker Beechcraft King Air, that are needed to ferry personnel to outlying facilities. Governments, too, are being targeted by the business jet sales forces.
Large-cabin, long-range jets are prevalent in the African business fleet, chiefly because of the distances involved. Airbus Corporate Jets sees a healthy potential market in the region for its single-aisle ACJ series, and, with that in mind, the company sent a VIP-outfitted ACJ319 from Comlux Aviation’s Bahrain-based fleet to AAD. Embraer had its Lineage 1000 on show, and Bombardier and Gulfstream dispatched their long-range aircraft to AAD.
With approximately 40 percent of the continent’s registered fleet, South Africa dominates African business aviation, and slow but steady economic growth in the country is expected to lead to more business jet sales. However, a new 7-percent tax is due to be implemented on aircraft imports, which may serve only to restrict sales rather than generate additional revenue for the government.
Nigeria is also a growing market, with more than 70 private/corporate jets operating in the country (although most are registered elsewhere). The country’s oil revenues make it the second largest economy in Africa, and a key target for bizav growth. Kenya, on the east of the vast continent, is another important country, with more than 100 aircraft used for business. Prosperity through natural resources has seen nations such as Angola, Mozambique, Tanzania and the Democratic Republic of Congo become markets for corporate aircraft.
While the market for business aviation is clearly there, the principal obstacle is the poor state of the aviation infrastructure throughout much of the continent. AfBAA is committed to improving conditions, not just in terms of airport facilities but also training systems and increased safety. The organization is working with key stakeholders, such as the OEMs, to encourage the development of the infrastructure to support business aviation, and also to shape regulations that make aviation in the continent safer.
Such efforts are necessary, and they will not benefit only local operators. Largely through its natural riches, Africa is attracting growing involvement from overseas, and that inward investment in turn has resulted in increased business aviation traffic to and from the continent. Improvement in aviation infrastructure is a key enabler to “greasing the wheels” of this progress.
Supporting Business Aviation in Africa
South Africa is naturally the hub of business aviation on the continent, particularly in the sub-Saharan region. It is the primary base from which the drive for greater reach into the continent has been mounted. A number of South African companies are looking north as they seek to expand their operations.
The largest of them is ExecuJet Aviation. The Switzerland-based group runs a large fixed-base operation at Johannesburg’s Lanseria Airport, which is the primary hub for business aviation in the country. ExecuJet also has a smaller FBO at Cape Town. It maintains approximately 200 aircraft and manages more than 50. Its maintenance approvals cover several airframe and engine OEMs.
One the most important recent developments in African business aviation is the opening in September by ExecuJet of an FBO at Murtala Mohammed airport in Lagos, Nigeria. This sizeable facility supports the growing business aircraft fleet in the country and provides an important gateway into Nigeria’s market for overseas business. In the Nigerian capital it faces competition from local group Evergreen Apple, which established its own FBO last year.