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The East African : Dec 22nd 2014
FINANCE Non-performing loans portfoli oin Uganda banks declines Page 43 BUSINESS DECEMBER 20-26,2014 AVIATION SECTOR TO EXPAND Airports to invest in technology to cope with growth in sector Af≥ica’s ai≥ t≥a∞c is p≥ojected to double by 2030 given the high p≥ofit levels on ope≥ations he≥e By MICHAEL WAKABI The EastAfrican A frica’s airports continue to battle capacity and technological constraints despite robust economic growth. The continent has posted growth rates well above the world average for several years, positioning it for boom years ahead, but with a few exceptions, airport managers have been slow to plan for future growth. According to experts at the 2014 edition of the Modern Airports Africa Conference in Entebbe recently, the continent must invest in new airport infrastructure today, for it to cope with the expansion in air travel that is likely to materialise as early as 2030. “African growth may be delayed but it cannot be stopped and air traffic is projected to double by 2030. Airports need to prepare now for the coming growth,” said Alexander Herring, the managing director of Safegate Germany and chairman of the conference. Stiff competition Planners were also urged delegates to keep a close eye on the competition, given the close proximity of airports in some parts of the continent where flying times are less than an hour from each other. Though home to 12 per cent of the world’s population, Africa’s share of the global air services market weighs in at less than one per cent. However, the region remains important for international airlines because of the higher profit levels on operations to Africa. Cargo and passenger traffic grew 10 per cent in 2013 and with half of the continent’s economies growing at 6 per cent and above during the year, the HORTICULTURE Kenyan flowers now gain free entry into EU market Page 45 41 cent of their revenues on safety and security, Africa will need to adopt the correct technologies to assure operational efficiency and security and security, he said. Yet, according to Mr Herring, with the right policies, airports also have the opportunity to grow and diversify their revenue base. With the emerging trend of airport cities, non-aeronautical revenues will overtake aeronautical revenues as the major revenue stream for airport operators. He added that the case for investment in airport facilities that appeal to both passengers and airlines is further anchored by the fact that increasingly, airports are becoming competitors and the quality of facilities will determine who attracts more traffic. “Airports were natural monopolies but now face growing competition because many are within an hour’s flying time from each other,” he said. Virtually all major airports are revamping or expanding facilities. In July, Jomo Kenyatta International Airport opened its new terminal 1A, the first phase of expansion works that will increase annual passenger capacity to 20 million. In Rwanda, the government 1.4m A security agent at the Jomo Kenyatta International Airport demonstrates how the Explosive Trace Detection Machine works at JKIA, Nairobi. Picture: File UPGRADE The new Terminal 1A at Jomo Kenyatta International Airport (JKIA) was launched in July as part of a mega greenfield terminal, whose construction began in December 2013. The twophased construction work is expected to be complete by 2017. Upon completion, it will have capacity to handle 20 million passengers a year. momentum will exert pressure on existing facilities. “Robust economic growth and a consistently growing air services sector mean that the region’s airports will continue to handle ever bigger numbers of passengers and cargo,” said Mr Herring. “But with the current capacity constraints and inadequate investment in infrastructure, airport operators must plan and invest now for growth in the coming years”. He explained that while the economic picture remains bleak in Europe and the US, the fundamentals for growth remain sound over large parts of Africa. With bulging passenger growth, airlines will increasingly deploy wide gauge aircraft such as the Airbus A380 and Boeing 777 series, which can disgorge as many as 600 passengers into a terminal in less than 20 minutes. Last month, Abidjan, in Cote d’Ivoire, became the fourth African city to berth the A380 after Air France deployed the Jumbo jet on the route while Emirates’ major order for the type is likely to bring more African cities into its orbit. The optimism in Africa comes against a backdrop of diminishing economic confidence in Europe as sanctions against Russia continue to shake the German economy, slowing down recovery from the Eurozone crisis. Growth in the US, India, China and Brazil has also slowed down. Mohammad Makhlouf, the chief executive for sub-Saharan Africa at Cairo-based HF-Giza Systems, said airports must also be prepared for security and safety challenges that will come with expansion in air travel on the continent. With airports spending as much as 60 per Number of passengers who used Entebbe International Airport in 2013 which has just completed the expansion of the passenger terminal at Kigali International Airport is also mobilising funding for a new airport at Bugesera, 20km south of the present airport. Kigali plans to use part of the proceeds from a $1 billion Eurobond it plans to issue in 2015 for construction of the airport. Ongoing construction works of Terminal 3 at Dar es Salaam’s Julius Nyerere International will see capacity increased to 6 million passengers annually on completion. Entebbe has unveiled a $350 million development plan that among other things will see expansion of the passenger terminal and cargo handling facilities. According to John Kagoro, the director for airports and aviation security at the Uganda Civil Aviation Authority, passenger traffic, which reached 1.4 million in 2013, is projected to hit 3.2 million in 2023 and 6.3 million in 2033.
Dec 15th 2014
Dec 29th 2014