ANALYSIS: December 2017 – Africa capacity insights for the month

In the continuation of a regular new series, The Blue Swan Daily offers a capacity snapshot in time and looks at the month ahead to highlight some of the key network trends across Europe, the Middle East, Africa and the South Pacific.


Summary:

  • Start of the month schedules show Dec-2017 departure seat capacity from Africa is expected to rise 7.6% versus same month last year.
  • Year to date Africa departure capacity has averaged a 6.3% growth across the first 11 months.
  • While a decline on the Nov-2017 performance, Dec-2017’s growth rate is the ninth consecutive month to see growth exceeding 6.0%
  • Full year growth in capacity from the Africa will be over double the rate recorded in 2016 (+2.9%) and its highest year-on-year rise since 2010.

In the case of Africa it is another strong month of year-on-year capacity growth although continued regional variations dominate the capacity story as we await the Continent’s big liberalisation. A further commitment last month towards the Single African Air Transport Market (SAATM) is commendable, but it is likely to remain a long process before we actually see any marked changes to intra-African connectivity and the true benefits of a liberal regime.

Overall start of the month network capacity within and from Africa is up 7.6% in Dec-2017 versus the same month last year, the ninth consecutive month to see growth exceeding 6.0% and the fourth fastest monthly rate of growth this year. This is down 1.2 percentage points on last month despite overall departure capacity rising in Dec-2017. This is the ninth consecutive and tenth overall month in 2017 to see higher growth than in 2016. The year average now stands at a healthy 6.3% having initially been weighed down by the slow growth in Q1.

CHART – Network capacity growth from Africa has shown stability through Q2 and Q3 and now is experiencing stronger performance in Q4 with nineconsecutive months of >6% risesSource: The Blue Swan Daily and OAG

Most noticeable in this month’s analysis is the capacity growth from Central and Western Africa. After eight months of capacity declines since the start of the year, the tide turned for this region in September when it returned to growth with year-on-year capacity up +4.4% for the month. This continued in October with a +5.3% growth versus the same month in 2016 and grew to +13.3% for November. While the rate of growth will stabilise in the month ahead, estimated at +8.0% based on forward schedules it still highlights a strong performance in the region.

Despite eight months of small capacity declines versus 2016, the region has now entered positive growth for the first time this calendar year with capacity across the first eleven months of the year up +0.6% on the same period last year and annual capacity growth of around +1.2% estimated for the full year, albeit the region will still have the slowest rate of growth across the Continent behind the full year estimates of +2.7% in Southern Africa, +8.6% in Northern Africa and +12.7% in Eastern Africa.

CHART – The latest month brings further positive news from Central and West Africa, a growth spike in Southern Africa, a second month of slowing growth in Northern Africa and yet another month of double-digit growth in Eastern AfricaSource: The Blue Swan Daily and OAG

The Q4 capacity rise of +8.7% in Central and Western Africa has seen the addition of over 600,000 additional seats over the three month period and is being driven by significant year-on-year gains in departure capacity from Sierra Leone (+33.9%), Mali (+30.2%), Gambia (+28.8%), Democratic Republic of Congo (+22.7%), Guinea-Bissau (+22.0%), Niger (+21.1%) and Chad (+20.1%), but it is the return of the Nigerian market (+13.9%) that has alone added more than 300,000 departure seats to the market, around 50% of the net seat gain for the period.

Eastern Africa remains the Continent’s strongest performer in 2017 with a tenth month of double-digit year-on-year growth in December. Only in September and October did growth rates slip into single digits, but still delivering healthy growth rates of +9.2% and+9.9%, respectively. The region is home to some of Africa’s strongest country performers in Dec-2017, including the two smallest nations in the area, Burundi (+41.7%) and Eritrea (+26.9%). However, it is the growth rates of Ethiopia (+12.8%), Kenya (+21.3%) and Rwanda  (+18.8%) that are delivering the additional seats to the region.

Northern Africa continues to deliver strong sustainable levels of growth, but has now seen a slowing rate for two consecutive months as growth has slipped from +9.9% in Oct-2017 to +9.0% in Nov-2017 and now +8.3% in Dec-2017. The region’s market is dominated by Egypt, Morocco and Algeria, which account for over  80% of its capacity inventory, and political instability and terrorism issues continue to impact activity across the region. Year-on-year growth will be seen across five of six countries in the region in Dec-2017, including a +20.0% capacity rise in Sudan and a +13.9% growth in Morocco, with Libya expected to see capacity decline more than a third (-38.3%) during the month versus Dec-2016.

Southern Africa is finishing the year as it started with Dec-2017 only second to Jan-2017 in terms of year-on-year monthly capacity growth – +3.6% and +5.5%, respectively. It has been a year of ups and down in terms of capacity growth with rates slipping to a low of 0.9% in September. The start of month numbers for Dec-2017 shows an end another downward rate trend that had begun at the start of Q4. The Dec-2017 performance has been supported by a +44.4% rise in departure capacity in Namibia and growth of +2.3% in the largest market of South Africa (which accounts for more than 75% of the region’s inventory).

CHART – Northern Africa remains the largest region in Africa based on departure capacity, but Eastern Africa has seen its share of seats increase from 16.7% to 21.6% over the past ten years, mainly eating into the share of the Southern African marketSource: The Blue Swan Daily and OAG