Report No. 49194 africa infrastructure country diagnostic

Domestic air transport

North Africa’s market is much more mature, and therefore less dynamic. Here too the state flag carrier plays the major role. In Algeria, Air Algerie, the national flag carrier, enjoys a monopoly on all published routes. Egypt, Libya, and Morocco have new entrants, but with very small percentage of market share. Morocco has seen the rise of Regional Air Lines, a private sector airline providing service to 13 city pairs, in some cases having completely replaced the 100 percent dominance of Royal Air Maroc. A summary of the number of airlines providing scheduled domestic service in North Africa can be found in table 1.12 in Appendix 1.

The growth in South Africa, Nigeria, and Mozambique is skewing the overall growth in Sub-Saharan Africa, and indeed with those countries removed the overall growth in Sub-Saharan Africa was nearly neutral at a negative .84 percent, with a net loss of 137 routes between 2004 and 2007. South Africa’s and Nigeria’s portion of the overall domestic market cannot be overlooked. The two countries combined comprise over 83 percent of all known scheduled domestic services, with South Africa alone comprising 72.5 percent.

The state of these markets highlights the variance of the conditions between the individual countries, showing once again that it is impossible to make blanket statements about Africa. For example, regardless of population, just by necessity island nations such as Madagascar, Cape Verde, Comoros, and the Seychelles will have scheduled domestic service. While Ethiopia has an extensive airline, domestic travel is much less, and has not shown much recent growth. The conditions driving a domestic market are related to topology, population density, per capita gross national income (GNI), and in many cases (but not always) also tourism.

In general, domestic air services are also highly concentrated in Sub-Saharan Africa. Of the 286 routes with service in 2007, only 54 had more than one service provider. Usually the service provider is the state carrier, though there are anecdotal examples of flag carriers subcontracting out thinner routes to private operators.⁹ Standing out among the larger countries for allowing competition in the sector are two countries in particular—South Africa (not surprisingly, having the most advanced air transport industry in Sub-Saharan Africa) and Tanzania. In South Africa competition exists only on the heaviest routes. Tanzania, by contrast, as of 2007 has more than one service provider on every one of its 17 domestic routes¹⁰.

Island nations are heavily dependent on air transport, both because of the physical nature of their geography and also because they often have a thriving tourism industry. As such, Cape Verde features a marginally more competitive system, though Transportes Aereos de Cabo Verde (TACV) still dominates at rates of 80 percent or above on all routes.

A summary of domestic routes in Sub-Saharan Africa can be found in table 1.13 in Appendix 1.

Pricing and connectivity

Another recent study by Intervistas for International Air Transport Association (IATA) concludes that the price elasticity of air transport within Africa is relatively high, attributed to the fact that those who can travel are considerably better off than those who do not, and are more immune to higher tariffs.¹¹

Figure 1.13 Pricing of flights within Africa versus intercontinental flights, kilometers flown

Source: Analysis on data collected by the World Bank. Note: The higher prices over lower distances reflect higher fixed costs that in longer flights are spread over more kilometers. Domestic pricing is most likely skewed by subsidized or fixed pricing on some routes, keeping costs artificially low.

Figure 1.14 shows that, compared to figure 1.4 on market overall market sizes, much of the same swath of countries can be seen in the group losing international connectivity. A clear line of countries can be seen including all the land-locked countries from Mail to the Central African Republic, and including many of the other smaller market coastal countries in the region, such as The Gambia, Benin and neighboring Togo, Cameroin, Congo Brazzaville, and Gabon.

Figure 1.14 Gainers and losers in international connectivity in Sub-Saharan Africa. Cape Verde, not shown, belongs in the latter category. The same swath of countries shown in figure 4 depicting market sizes, including the landlocked countries ranging from Mali to the Central African Republic, are visible here, indicating an area of clear decline.

Source: Analysis on data provided by Seabury ADG