By KENNETH EHIGIATOR

This year’s Maintenance, Repair and Overhaul, MRO, conference ended in Addis Ababa, Ethiopia with tales of woes trailing developments in the aviation sector. The parley, which drew experts from all parts of the globe, was unanimous that the aviation sector on the continent was ebbing at a very fast pace, despite the huge potentials that abound for the industry to prosper.

Perhaps the only positive thing that came out of the discussions was the fact that Africa remained the next destination in aviation development, with Europe, the Americas, Asia and Oceania already exhausted. Current forecast has it that, between 2012 and 2031, Africa would receive 900 aircraft deliveries from Boeing; 957 from Airbus and 550 from Bombadier.

And because Africa remains the next destination of aviation exploits, all segments of airlines’ business were very well represented, including the four major aircraft manufacturers in the world, namely U.S. Boeing Corporation, Europe’s Airbus, Canadian Bombadier and Brazil’s Embraer. Similarly, aircraft engine makers, such as Pratt and Whittney and General Electric, were also present, while MRO centres from different continents of the world had their voices heard. Airlines and aircraft lessors also attended in their large numbers.

What kept everyone in the hall of Addis Sheraton Hotel, venue of the 22nd African Aviation MRO Suppliers and Stakeholders Conference, numbed was the revelation by the Managing Partner of Ernst and Young in Ethiopia, Dr. Zemedeneh Negatu, that 95% of African airlines was distressed, revealing further that of the $59 billion to be spent globally on MRO this year, Africa’s share of the market was only 4% because of inadequate MRO centres on the continent. Aside from Ethiopian Airlines, South African Airways, Kenya Airways, Egypt Air and Air Maroc, no other African airlines has an MRO centre, though maintenance takes a greater chunk of their revenue.

Dr John Tambi, Transport Infrastructure Expert and Coordinator for the Presidential Infrastructure Champion Initiative of NEPAD Planning and Coordinating Agency, in his welcome remarks, was almost in tears when he noted that, in 2009, 78% of all intercontinental flights into and out of Africa were operated by non-African airlines. He said the situation had not improved markedly as non-African airlines still carry more than 65% of traffic into and out of the continent.

Tambi said the aviation sector could contribute a sizeable amount to African Gross Domestic Product, GDP, and create over six million direct and indirect jobs for the teeming unemployed youths in Africa, if properly harnessed. He, however, said: “Aviation growth in Africa will depend on several factors, key among them, which is often overlooked, is the necessary infrastructure, development of African MROs and coherent cooperation with foreign partners and suppliers for aviation spares and components.

“Current African aircraft maintenance and repair sector is valued at approximately $1.2 billion and according to experts, this figure is expected to increase by 40% in the next decade based on global tendencies. Although Africa is becoming increasingly attractive to investors, several factors still stand in the way of major developments. The market is still restricted by lack of poor infrastructure. Furthermore, such problems as airspace restrictions, obsolescent fleet, brain drain, bureaucratic interference, high operating costs, stiff prices and lack of cooperation experience prevent Africa from realising its full aviation expansion potentials.”

On the way forward, Tambi proposed expansion in infrastructure, improvement in investment climate by African governments, harnessing of new innovations, and building of institutional capacity.

The position of the Commissioner for Infrastructure and Energy, African Union, Dr. Elham Mahmoud Ahmed Ibrahim, was not radically different from that of Tambi, as she noted that lack of cooperation among African airlines had been a major debilitating factor against growth of aviation on the continent.

She, however, said the AU was working tirelessly to ensure African governments gave prime attention to development of aviation infrastructure. According to her, that remains the only way the continent can fully optimise its potentials in the aviation sector and take full advantage of predicted inflow of foreign investments into the aviation sector, especially in MROs.

Zemedeneh Negatu, Managing Partner, Ernst and Young, Ethiopia, noted that by 2050, African would contribute 12% of global GDP, which currently stands at 4%, saying this could only be possible, if all the necessary infrastructure was put in place, especially in the aviation sector, which he considered as economic driver and engine of growth. Negatu situated his prediction on the fact that investor in all corners of the world were struggling to play on the continent. He, however, lamented that the aviation sector that should drive the investment flow was currently not doing well.

Negatu, who helped to transform Ethiopian Airlines to one of the biggest in Africa, lamented that the combined capacity of Africa’s biggest airlines, namely Ethiopian Airlines, Kenya Airways and South African Airways, was just a third of Emirates Airlines. He blamed the development on the refusal of African carriers to merge and form a strong competitive force against their foreign counterparts who, according to him, dominate close to 70% of Africa’s commercial airlines’ business.

“The way to go for African airlines is to merge and become a strong force. The airlines as they are currently cannot compete because they are weak. If two of America’s biggest airlines, American Airlines and U.S. Airways could merge, why are African airlines not merging?”, Negatu said. He implored airline operators on the continent to play down on ownership and be ready to merge and collaborate to fuse into mega carriers.

He also frowned on inadequate MRO centres in Africa, arguing that a situation where airlines take their planes overseas for maintenance and pay in hard currencies not only raised their cost of operation but also limited their ability to run safe and profitable operations. For instance, African airlines without an MRO centre spend as much as $1.5 million on C -Check on every aircraft within a period of 18 months in Europe and America.

At present, there is no doubt that Ethiopian Airlines remains the only African carrier operating profitably and competing with non-African carriers on routes it is operating. Two other flagships of the continent, Kenya Airways and South African Airways are not doing as well as Ethiopian at the moment. This, perhaps, informed the reason Ethiopian Transport Minister, Ato Deriba Kuma, urged other carriers on the continent to follow the airline’s example.

He said: “With an ever increasing middle class, and fast growing economy, we are truly seeing the African Renaissance with immense economic growth. And one of the drivers of economic development and growth is mobility and air connectivity. However, air services for passengers and cargo in Africa cannot sustain and flourish without the presence of strong providers of aviation related services within the continent.”

Speaking further, he said, “Ethiopian success in the aviation industry and its backing in-house service providers is a very good case study for Africa. One of such in-house provider is Ethiopian MRO, which is as old as the airline.

International aviation consultant, Mr. Nick Fadugba, whose platform organises the MRO conference annually, said the bane of most African airlines was lack of a sound business plan to survive the strong competition offered by African airlines.

Fadugba, who had been in the forefront of campaign for integration of airlines on the continent, said for African airlines to survive and prosper, they must get into alliances, with a view to fusing into strong and mega carriers. He also flayed government’s interference with developments in the aviation sector and warned strongly against government intrusions. “The policy of the Ethiopian government not to interfere with how Ethiopian Airlines is run is the way to go. All other governments in Africa should do same, if their airlines must be strong.”

MRO centres’ representatives and aircraft lessors, who came in from all corners of the world, highlighted the frustrations they go through dealing with African airlines who patronised them for aircraft leasing and maintenance, accusing them of violating MRO and lease agreements, which often lead to seizure of their planes after repair due to their failure to pay.

At the end of the brainstorming sessions, it was agreed that for African airlines to grow and prosper and for the continent to be prepared for the surge of foreign investments into the aviation sector, there must be massive infrastructure development of the aviation sector; absence of government interference in and intrusion into aviation matters; need for airline mergers and alliances; establishment of more MRO centres in Africa; need for strong corporate governance in African airlines and capacity building by way of training and retraining of personnel through establishment of more aviation academies.