Drivers of Growth in the Airline Industry in Sub-Saharan Africa

Date
2012-09-10
Authors
Meyer, Nicolas Demis
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Abstract
The African airline industry has historically always been very small in comparison with the global airline industry. Currently Africa constitutes only 3% of world traffic placing it as the smallest aviation marketing the world, even more interestingly this figure is predicted to decrease to 2% in 2023 (Fatokun, 2005). In order to better understand the general trend of decline seen, the factors which affect growth of the airline industry in Sub-Saharan Africa where studied and mapped in order to ascertain which of these play a significant role. Various South African airlines where approached as well as industry experts for interviews but the response was very poor, with only one industry experts forthcoming. It was thus decided to mainly utilise a quantitative approach with comments from the industry expert also considered. A Fuzzy Cognitive Map (FCM) was constructed based on these findings and was trained using the gradient descent method Data from South Africa, Kenya and Nigeria where used as training data as it was thought that these represented a good crosssection of Sub-Saharan Africa countries. It was discovered that the size of the economy of Sub-Saharan African countries contributed the most to the overall growth and profitability of the airline industry in that country, with the level of alliances, fuel price, legislation as well as tourism also playing significant roles. It should be concluded that Sub-Saharan African countries can take steps to encourage growth in the airline industry within this region, however the biggest contributing factor will always remain the size and strength of the economy and thus Sub-Saharan African countries should always place economic growth and development on the foreground of any commercial aviation development plans within the country.
Description
MBA thesis
Keywords
Airline industry, Aviation industry
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