Editor’s Note: December 13, 2018
It’s a bad time to launch an African airline
African airlines are expected to post a $300m loss in 2019, the only decline globally, following $400m in losses this year according to new data from the International Air Transport Association (Iata).
This is bad news for efforts by a growing list of African governments – including Nigeria, Zambia, Ghana, Uganda, Chad, Tanzania and Zimbabwe – to revive or launch national carriers.
The aim is to improve Africa’s notoriously poor connectivity and tap into rising demand for business and tourism travel, particularly from Asia.
The problem is that launching a national carrier is probably the worst way to do this.
Not only do they have a good chance of becoming a drain on public finances, they could make things worse by competing with existing airlines and adding redundant capacity. According to Iata most airlines on the continent are falling short of the estimated 60.3% load factor – the number of seats sold per flight – needed to break even.
The focus needs to be be on reducing costs and implementing policies to liberalize Africa’s fragmented airspace – the main barrier to growth – like the recently launched Single African Air Transport Market initiative.
This at least was the crux of a recent appeal to governments by the industry itself.
From The Continent
South-Africa’s Shoprite, Africa’s biggest grocery retailer, is set to open its first store in Kenya’s capital Nairobi today amid intensifying competition with major rivals like France’s Carrefour following the collapse of local supermarket chains Nakumatt and Uchumi. Shoprite is moving into space vacated by Nakumatt, which filed for bankruptcy in October. More: Bloomberg
Three people have reportedly been killed in two days of clashes in Democratic Republic of Congo between security forces and supporters of opposition candidate Martin Fayulu ahead of presidential elections on December 23. Fayulu is one of two main opposition leaders challenging outgoing Joseph Kabila’s chosen successor Emmanuel Ramazani Shadary in the vote. More: Africanews
The Daily Stat
Nigeria’s expected GDP growth in 2019, up from 2% this year, according to government estimates. More: Reuters
The Global Perspective
Canada’s Barrick Gold has reportedly agreed a $300m payment with Tanzanian authorities as part of efforts to resolve an 18-month tax dispute that has crippled the operations of its subsidiary Acacia. This is part of a crackdown on the sector by president John Magufuli, ostensibly aimed at securing more equitable terms for the country. More: Reuters
Somalia has granted 32 fishing licences to China, the first time a foreign country has been awarded such rights since the government of president Mohamed Abdullahi Mohamed took office in early 2017. Illegal fishing by foreign vessels is thought to cost Africa billions of dollars each year. More: BBC
The Daily Follow
@googleafrica: News and updated from Google in Africa.