With demand for air services in Africa growing rapidly, the continent’s airports should respond to the challenges of rapid growth by investing in non-aeronautical and commercial revenue streams, according to Airports Council International (ACI) World.
Addressing stakeholders March 8 at the 2019 ACI Africa Regional Conference and Exhibition in Luxor, Egypt, ACI World Director General, Ms. Angela Gittens said that boosting non-aeronautical revenue would help airports modernize and improve infrastructure, as well as upgrading the customer experience and ensuring an economically sustainable and more resilient business.
It is estimated that passenger traffic in Africa will reach 450 million by 2040, with a long-term compound annual growth rate of 3.7%.
To cope with this growth, the region’s airports must generate enough revenues to finance activities, build new infrastructure and remain competitive.
“Non-aeronautical revenues are key contributors to the financial success of airports as they not only help to diversify [their] income base, but also serve to help them weather economic downturns,” Gittens said. “They can be a source to help recover operating costs and reduce the use of aviation taxes for future airport development.”
Meanwhile, ACI Africa secretary general Ali Tounsi highlighted the continent’s recent growth in both passenger and air cargo traffic.
ACI said Africa’s aviation growth rate has benefited from a recovery cycle in some of its major economies, as well as an upswing in commodity prices.
In 2017, Africa’s passenger traffic grew 6.3% year-over-year and 10.3% on a year-to-date basis by November 2018. Air freight grew 9.2% in 2017 year-over-year and 11.8% year-to-date—the largest percentage gain in overall volume in the world.
However, African airports continue to face several challenges to growth, including the painfully slow implementation of the Yamoussoukro Decision that is designed to bring about an African “Open Skies” system, as well as security threats and political instability. A lack of resources has also created infrastructure shortfalls and gaps in safety regimes.
“Considering the region’s potential for growth and its possible impediments, it has become more important than ever for airports to develop their non-aeronautical revenue streams,” Ali Tounsi said.
“Airports must continually find new ways of generating revenues, set competitive charges, offer incentives and rebates, and invest in quality enhancements and capacity to meet the needs of the future.”