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Embraer targets the huge opportunity in Africa

Posted 5 September 2019 · Add Comment

The Embraer Airline Business Seminar Africa 2019, held in Mauritius at the beginning of April, kept all its promises. The Brazilian manufacturer, which has recently partnered with Boeing, sees Africa as a market with a “huge potential”. Anuradha Deenapanray reports.

The African aviation and air transport market, which is among the fastest growing, “presents significant opportunities for airlines to deliver the connectivity that the whole continent needs”, according to Arjan Meijer, chief commercial officer, Embraer Commercial Aviation.
“Aircraft, however, must be right-sized to develop those routes profitably; more than 90% of intra-African flights depart with fewer than 150 passengers. And more than 70% of markets are served with less than one flight per day.”
According to Raul Villaron, VP Middle East & Africa, by redefining the traditional concept of regional aircraft, Embraer offers Africa the “ideal aircraft” to face the connectivity problem while meeting the growing demand in this expanding market.
As engines and avionics are becoming more sophisticated and complex, maintenance, repair and overhaul (MRO) is a big challenge. During the past years, Embraer has been strengthening its support in Africa (new training facilities in South Africa) and the Middle East.
Last April, it signed a pool programme agreement with Air Botswana to support a wide range of repairable components for its E170s.
The seminar enabled airline specialists and aviation experts to share ideas, experiences, strengthen their network and improve their business in a competitive environment.
Airline business is a very capital-intensive industry and, therefore, companies need to respond efficiently to growing demand through aircraft acquisition. In Asia Pacific, 43% of aircraft are leased against 40% in Europe and only 23% in Africa.
Volker Muenster, VP marketing – NAC (the largest regional aircraft leaser) said Africa should look into leasing to re-fleet and modernise. He added that, in such a risky business, there’s a need to consider the actual cost of equity in a company’s analysis.
According to Marc Abraham from Investec, a good balance or mix between leasing and purchase can be interesting for airline growth. African airlines – especially private ones – are turning more and more towards leasing.
The future of limited liability companies (LLCs) in the air transport ecosystem was also addressed through shared experiences and success stories. Ogaga Udjo, head of network planning, scheduling & alliances with Comair and Kulula, showed how efficiency and consistency are important components of a customer-centric strategy to leverage on a brand.
Looking at island operations, panellists pointed out that specifics of island economies needed to be taken into consideration as they had particular challenges regarding air access and open sky, connectivity, oil prices, investment, infrastructure, services and market expectations. Nick Fadugba, CEO of African Aviation Services, said that island states and landlocked countries realised the importance of the weight of aviation in their gross domestic product (GDP).
With more than 200 aircraft flying in Africa and 2,000-plus worldwide (120 airlines in more than 60 countries), the Brazilian manufacturer is the leader in the up-to-150 seats segment, with 29% share of deliveries.
As innovation and technology underpin customer expectations, development strategies and services, there are growing challenges facing industry stakeholders to enhance security. Key elements to embrace sustainable growth are adaptability, efficiency, competitiveness, cooperation and partnership.
Aaron Munetsi, GM, South African Airways, noted: “We are better off working together and not competing with each other. Africa should be the hub.”
 

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