What’s Stifling African BizAv Investment?

Several experts interviewed in past AvBuyer Africa articles have spoken of the levels of bureaucracy that hinder Africa’s Business Aviation industry, driving investment away. But what shape and form does that bureaucracy take? According to several experts, defining it is not so simple as it takes several shapes and forms.

According to UAS Africa, for example, each African nation has differing operational regulations governed by different aviation authorities, which demands huge attention to detail for those planning trips across the continent - particularly when liaising with authorities to secure overflight and landing permits. “Further, the regulatory authorities and processes are often slow, hindering quick approvals which often results in wasted time and opportunities for revenue,” a company spokesperson shares.

For Morry Davis, Deputy CEO at Krimson Aviation, navigating through these hurdles can lead to operational inefficiencies, increased costs, and overall slower development of Africa's current private aviation industry. “These challenges often manifest in extended delays to obtaining necessary permits; complex regulations that vary widely across different countries; difficulties in importing aircraft due to inefficient administrative processes; and limited competition due to high market entry barriers.”

Nevertheless, it would be a mistake to generalize that the entire continent has barriers regarding bureaucracy. There are exceptions, as Jeffrey Emmenis, CEO of Swiss-based Vertis Aviation (which has an aviation charter branch in South Africa) notes. “Yes, bureaucracy can be problematic, but it depends on which area of Africa you are working in. Some nations - such as South Africa - understand private aviation well and have processes in place.

"Other nations, including Nigeria, are creating more streamlined processes but still have a way to go, and tax remains high to import aircraft there. Any aircraft with a Nigerian registration is potentially subject to higher insurance fees, too.”

In terms of solutions, there’s a consensus among experts that working on public-private collaboration and promoting new technologies would be a good start.

"Streamlining regulations, facilitating PPP investments, promoting technological innovation, and increasing operational capacity through education and training programs are all clear examples of value-added activities with industry participation," Davis suggests.

Emmenis believes that educating the governments about the benefits of private aviation is crucial for the success of Africa's Business Aviation industry. “The African Union has improved its understanding, and the pandemic also demonstrated its benefits when most of the world’s commercial fleet was grounded,” he adds.

Furthermore, Neil Howard, CEO of Absolute Aviation believes widespread collaboration is part of the solution. “Single African Air Transport Market (African Open Sky) would be optimal, as would greater transparency and collaboration from the regulators.”

The Role of Airport Infrastructure on African Private Aviation

Modernization of airports and associated infrastructure has always been a sign of improvement in the industry - one which is usually supported by increased demand. This is an area that requires urgent improvement in Africa, especially in the Business Aviation ecosystem which has limited FBOs and MRO facilities.

The UAS Africa spokesperson notes that obsolete and inadequate handling equipment is also an issue that needs to be addressed. "Handling companies struggle to maintain this equipment, let alone upgrade it," they explain, adding that another big challenge is power supplies limiting airport operating hours. "A lot of airports that could be booming with traffic cannot operate beyond the limitations of sunrise and sunset due to lighting problems."

Emmenis has a similar view, suggesting that infrastructure slows down the adoption of private aviation. Main airports are not always ready to handle private aviation, and while they can service an Airbus A320 they do not have the equipment to support, perhaps, a Gulfstream G650. He also notes that a lack of understanding of customs impacts the overall private aviation experience.

"Some countries have ground services that will guide Business Aviation passengers through executive airports, but it is relatively new," Emmenis adds. "This means that the Business Aviation experience currently generally ends sooner than it should, as passengers end up merging with the passengers from commercial flights."

While the number of MROs and support networks have improved in recent years in Africa, there is still some ground to cover regarding widespread options for operators and owners. In the eyes of the experts, this reality hinders the growth of the industry, which, as a result, ends in costly alternatives.

"The absence of African-based FBOs & MROs geared for private aviation is a clear infrastructure deficiency," Davis notes. "This is in addition to a lack of universal air traffic control, customs and immigration, fueling, and airport security infrastructure standards across countries."

What Incentives Could Harness More Investment in African BizAv? 

Governments usually serve as the building block to drive investment into a region, creating a stable environment for added investment and healthy competition, either by establishing tax incentives or having the willingness to implement new technologies.

“A government’s willingness to embrace and enable the use of new aviation technologies such as eVTOL and UAS would also attract cutting-edge firms onto the continent,” Davis highlights.

UAS Africa's spokesperson, meanwhile, believes that free access to capital for new acquisitions and maintenance would be another huge step forward. “For example, a major problem faced by a lot of airlines is the inability to remit their earnings back to their countries due to the scarcity of foreign exchanges. Recently, Nigeria and a few other countries in Africa have been in the news for this reason.”

To attract more investment, experts agree that governments need to create more enabling environments, with consideration that the needs of Business Aviation are different, and perhaps more sophisticated and challenging than the ones presented by the airline industry.

Rising Trends in African BizAv

While bureaucracy is still present in many African nations, positive trends are impacting all the stakeholders in the industry, from passengers to regulators. One example Emmenis has witnessed is the aircraft maintenance work being conducted by nationals which is a good sign for the industry as it means there is a homegrown workforce developing.

“Human resources are developing, and operators now have access to on-the-ground support in some countries which helps to increase efficiencies through local knowledge," he adds. "The landscape is changing and evolving."

And Davis adds that cross-sector collaboration is a positive trend that cannot go under the radar. “Strategic partnerships and collaborations between private aviation companies and other sectors, such as luxury tourism, real estate, and business services, are becoming more common," he says.

“Perhaps most importantly, there are a few key efforts underway designed to enhance regional integration and cooperation within Africa at large. Initiatives such as the African Continental Free Trade Area (AfCFTA) may lead to increased cross-border travel and trade, which would in turn benefit the private aviation sector."

Infrastructure, such a key aspect in the development of the industry, is part of the positive future trends expected in the region, according to UAS Africa's spokesperson, who highlights that “many new airports are being developed, particularly in East Africa, that will be capable of catering to the requirements of Business Aviation operations”.

On the other hand, Howard notes that aircraft owners are weary of importing aircraft (new or pre-owned), due to economic instability and CAA bureaucracy on the continent. “If we do get aircraft into the country, there are usually long wait times to get them on the South African register, and then we struggle to register them on the AOC," he shares. "This leads to all the players competing to use the same small fleet.

In essence, the vastness of the African continent, and the diversity of remote locations only accessible via private aviation, coupled with the lack of scheduled airline itineraries, are overlying components that evidence the potential of the Business Aviation industry for investors. With less bureaucracy, one can only wonder how the significance of the continent as a global player could play out...