Chinese airlines focus on Africa’s growing market

Nov 13, 2015

Africa has witnessed more frequent flights from China in recent years as Chinese airlines are paying more attention to the African market.

On November 2, Air China launched a route to Addis Ababa, Ethiopia, as part of its global expansion. The route is the national carrier's second destination in Africa and will fly from Beijing to Addis Ababa three times a week. On October 29, it launched a nonstop flight from Beijing to Johannesburg. 

In August, China Southern, which operates the largest fleet in Asia, made its maiden flight from Guangzhou to Nairobi, Kenya. The route was the first connecting the Chinese mainland to Africa. The flight, flown on an Airbus A330, takes 11 hours.

In June, Hainan Province-based HNA Group, the parent of Hainan Airlines, agreed to pay $13 million for a 6.2 percent stake in South Africa's Comair, as part of its plans to expand into the African market. 

Passengers taking a China Southern Airlines flight arrive at Jomo Kenyatta International Airport in Nairobi, Kenya. Photo: CFP

Returning to the continent 

Many Chinese airlines such as Air China, China Eastern and China Southern once had routes to destinations across Africa, including South Africa, Egypt and Sudan, but all flights were suspended in 2013, CAAC Journal reported in November.

Insiders attributed the suspension primarily to the uncertainty of the local political situation and the lack of maturity in Africa's financial system, even though the market is big.

However, in recent years, the trade between China and Africa has created a robust market. Furthermore, the "One Belt, One Road" initiative has provided more opportunities for Africa's growing aviation market. 

In an earlier interview with the Global Times, He Zhigang, general manager of Air China's marketing department, said Air China is opening routes to Africa because there are more Chinese companies doing business there. 

In 2009, China became Africa's largest trading partner. It has remained so since. In 2014, trade volume between China and Africa hit a record high of $221.88 billion, according to the Ministry of Commerce.

Kenya Tourist Board managing director Muriithi Ndegwa said Kenyan tour marketers based in China and local Chinese tour operators have seen more interest from Chinese tourists in visiting the world-famous Masai Mara National Park and other sites in the country, whose tourism sector has slumped recently, Xinhua reported in October. 

Competition ahead

China has signed a civil aviation pact with 17 countries in Africa, including Ethiopia, Tanzania and South Africa. Those destinations, Nairobi, Johannesburg and Addis Ababa, are good locations, and the carriers could extend the routes through African airlines with the help of code sharing under the alliances. 

However, the expansion in African market has not been as smooth as expected. Some national carriers in Africa have not performed well. Chinese airlines in Africa are lagging behind established rivals in terms of destinations and network.

In 2003, for example, Nigeria Airways was forced to stop operations in 2003 after falling into debt. In 2009, Zambian Airlines suspended its service due to rising fuel costs. More recently, loss-making South African Airways has become strapped for cash and has struggled to compete with low-cost domestic carriers and foreign operators with vast networks. In May, it suspended its direct route to Beijing.

More overseas airlines, such as Turkish Airlines, Air France, Lufthansa and Emirates have grabbed much of the African market. Emirates now flies to nearly 30 destinations on the continent. Last month, it added Mali's capital Bamako to its list of destinations, making it one of the largest airlines operating in Africa. It flew more than 5 million passengers to and from the continent on more than 21,000 flights in the fiscal year ending on March 31.

"There are more challenges for Chinese aviation companies in Africa than opportunities," Zou Maogong, an expert recommended by aviation news portal carnoc.com, told the Global Times on Thursday. 

The market for business travelers and tourists in Africa is far from large, and it will take a long time for Chinese airlines to cultivate the market, Zou said. "A route from Beijing to Addis Ababa could cost Air China 400 million yuan ($62.8 million) a year," Zou said.

Some airlines also complained that local protectionism has impeded growth. 

Bloomberg reported in November that African budget carrier FastJet Plc, which wants to become the first discount airline spanning sub-Saharan Africa, has been held back by government protectionism and unprofitable state-owned carriers that resist new entrants to their markets.

Credit: Global Times

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