IATA Warns of Capacity Crunch as Air Travel Picks up.

Airports could be fast approaching infrastructure capacity crunch that would restrict connectivity and choice for passengers and businesses, International Air Transport Association (IATA) has warned.

IATA latest data indicates a growing demand in air travel business putting pressure on the existing aviation infrastructure.

International passenger traffic in August grew by 10.6 per cent, adding 0.6 per centage points to July’s.

During the month under review, the volume of passengers carried in the African region grew to 10.1 per cent from 8.1 per cent in July.

“Despite the current global political uncertainty, the strong demand for international travel in August points to a promising outlook,” notes International Air Transport Association in August 2024 data.

“As of August 2024, international air travel demand’s monthly volumes have marked historic highs, or inched closer to them, for all regions including for the whole industry, expect for Asia Pacific, which is 8 percentage points from full recovery.

According to IATA, all regions’ international markets achieved rates above 4.3 per cent, with North America and the Middle East slightly decelerating compared to July, in line with their typical seasonal patterns. Airlines from the Asia Pacific region continued to lead, achieving the highest growth at 19.9 per cent YoY, followed by Latin America and Africa, at 13.6 per cent and 10.1 per cent, respectively.

All regions showed growth for international passenger markets in August 2024 compared to August 2023. Ticket sales in May-July for travel in August-September showed a 6.6 per cent year-on-year increase, which bodes well for further strong growth this year.

“The market for air travel is hot and airlines are doing a great job at meeting the growing demand for travel. Efficiency gains have driven load factors to record highs while the 6.5 per cent capacity increase demonstrates resilience in the face of persistent supply chain issues and infrastructure deficiencies,” said Willie Walsh, IATA’s Director General.

“Looking ahead, the continued strong demand growth signals that we could be fast approaching an infrastructure capacity crunch that would restrict connectivity and choice for passengers and businesses. If governments want to maximize the benefits of aviation, they must take bold decisions to ensure sufficient infrastructure capacity. And, in the interim, both airports and air navigation service providers need to do more with the resources they currently have. In particular, the variance in declared capacity of airports with broadly the same infrastructure needs to be resolved, with airports emulating the best performers. The industry cannot afford to under-utilize the airport infrastructure that we have,” said Walsh.

Source: Kenyan Wallstreet

Uganda Airlines launches new Zimbabwe route this month

Uganda Airlines is set to launch flights between Entebbe and Harare on 25 September, aiming to boost bilateral trade and tourism between Uganda and Zimbabwe. Chief Commercial Officer Adedayo Olawuyi highlighted the potential for increased trade and tourism, citing the lack of direct air links between the two countries. The airline will initially operate four flights covering Entebbe, Lusaka, and Harare.

The airline plans to expand its services to include Lusaka, Bulawayo, and Victoria Falls, tapping into the high-traffic routes between Zimbabwe and Zambia. This move is part of Uganda Airlines’ broader strategy to grow its regional network.

Uganda Airlines also intends to transport cargo, capitalising on the volume of goods traded between the destinations. The carrier hopes to break even within 18 months of launching the new routes.

This expansion comes as Zimbabwe attracts over 20 foreign airlines, thanks to its growing economy, tourism sector, and open skies policy. Uganda Airlines plans to extend its reach to China and London by year-end.

Source: ATTA.     

Aviation workers’ strike impacts travel costing millions.

The brief strike at major airports in Kenya which disrupted international and domestic flights on Tuesday night, September 9, and Wednesday, September 10, left passengers stranded and cost agents and airlines millions.

The strike was triggered by objections to the government’s proposal to lease Nairobi’s Jomo Kenyatta International Airport to an Indian company. Workers felt that jobs would be lost, and that control of a Kenyan asset would be lost by Kenya.

The Kenya Association of Travel Agents (KATA) has commended both the Government and the Kenya Aviation Workers Union (KAWU) for quickly resolving the impasse and agreeing on a return-to-work formula.

However, KATA emphasized that such industrial action, with its far-reaching consequences, should never have been allowed to occur in the first place. The strike’s impact has been devastating, with the travel industry facing significant financial and operational losses.

Preliminary estimates suggest that members of KATA lost over KES200 million (R27,9m) in air ticket sales alone, excluding rebooking fees and the costs incurred by airlines in accommodating passengers who missed their flights.

“When accounting for related services such as accommodation, ground transfers, and travel insurance, the total losses could easily exceed KES500 million (R69,8m). Some international airlines flew back empty, while others have indefinitely cancelled or rescheduled flights, further disrupting operations,” KATA said.

KATA highlighted that the frustration, anxiety, and distress caused to passengers have tarnished the reputation of Nairobi as a regional aviation hub.

“The strike’s impact on Kenya’s already fragile economy cannot be overstated. KATA calls on the Government to take decisive action to ensure that the underlying issues with the workers’ union are permanently resolved, preventing any future disruptions to airport operations. Kenya simply cannot afford another crisis of this magnitude.”

Source:   Travel News

IATA and Outpayce help airlines accept account‑to‑account payments

Outpayce, a venture launched in 2023 to improve Amadeus’ travel paymens sector, has partnered with IATA to enable airlines to accept account-to-account (A2A) payments.

Recent regulations in many markets make it possible for merchants to accept payment from consumers using direct, account-to-account transfers. As airlines seek to best meet the needs of travelers and reduce the overall cost of payments, account-to-account payments are becoming very popular, and they represent a new option for travelers to pay for air tickets.

That’s why IATA and Outpayce are partnering so airlines can now accept payments made with IATA Pay through Outpayce’s Xchange Payments Platform (XPP).

IATA Pay is an alternative account-to-account form of payment for travelers to pay for air tickets purchased online by directly debiting their bank account. It leverages the new account-to-account rails and regulations developed by countries around the world such as India (UPI), the Netherlands (Ideal), Brazil (PIX) or Philippines (QR Ph). Currently available in over 30 countries, IATA Pay improves the speed and security of payments, while reducing payment acceptance costs.

When a traveler reaches checkout on an airline’s website the new account-to-account payment service allows them to select their bank or scan a QR code depending on the country. IATA uses the payment and bank details or the QR code’s approval to request a transfer from the passenger’s account and the funds are transferred using the banking rails. IATA settles the funds with the airline the following day.

Juan Antonio Rodriguez, Director Financial Settlement Operations, IATA said: “The trend towards account-to-account payments is gaining more momentum. It provides a seamless experience for passengers and provides an attractive option for airlines to lower the cost of payment acceptance. Through Outpayce, airlines using XPP can begin to accept IATA Pay while still benefiting from XPP’s powerful orchestration, analytics and reporting capabilities.”

Anna Isabel Bengzon, Chief Financial Officer, Philippine Airlines said: “We are pleased to now accept IATA Pay in the Philippines. It will provide our passengers a more convenient and secure way of paying via QR code using their digital wallets, which is highly prevalent in the country, or through their bank accounts. Outpayce’s XPP system helps us to intelligently accept a wide range of payment methods used by travelers across the international markets we serve. Moreover, we can access various payment methods and partners through XPP, with detailed analytics on the performance of payment flows and back-end reconciliation support.”

Jean-Christophe Lacour, SVP and Head of Product Management & Delivery, Outpayce added: “We’re committed to helping travel companies accept the widest possible range of payment methods through a single connection to XPP and IATA Pay represents an interesting new option for the industry. By making it easier for partners to connect to XPP using self-service APIs we intend to broaden this choice even further.”

IATA is one of the first partners to connect to Outpayce’s Xchange Payment Platform using its new self-service APIs, being piloted in 2024. The addition of self-service APIs helps to open XPP, making it easier for any payments or fintech company to connect its services, which increases choice for travel companies and further optimizes payment orchestration.

Source:  Outpayce  

African Airlines’ Passenger Revenue Jump by 8% in Q1 2024 – AFRAA

The world airline industry has maintained its trajectory of recovery during the first quarter of 2024 with a rebound in passenger demand, according to African Airlines Association (AFRAA).

African airlines carried more international traffic during the first quarter of 2024, around 33% of the total traffic. This is a seasonal effect due to the Easter Holiday usually rise during Q1, particularly in March.

The Intra-African traffic represented 30% whereas domestic traffic was 37% during this quarter.

Passenger Revenue in the first quarter 2024 increased by 8% as compared to passenger Revenue in the first quarter 2023.

International traffic is dominated by the intra-African, with 44% in Q1 2024. Outside the continent, Europe is the first destination region of African airlines.

South Africa is the dominant market in terms of domestic traffic in Africa; it recorded 5 routes amongst top 10 in this first quarter 2024. Egypt, Kenya, and Nigeria also have domestic routes among the ten busiest.

The non-domestic traffic is dominating for intra-African traffic especially between Kenya, Tanzania, Ethiopia, Uganda, representing 40% of the continental traffic.

The ten busiest Intra-African routes are generally within Southern and Northern Africa. Only one Eastern (Nairobi – Entebbe) and Western African route (Accra – Lagos) appeared in the top 10 during the first quarter 2024.

Addis Ababa airport handled around 192 thousand tons of cargo during Q1 2024. Johannesburg and Nairobi followed with 121 thousand and 112 thousand tons, respectively. Two West and East African airports are part of the top 10: Lagos ,Dakar, Nairobi and Entebbe.

During the first quarter of 2024, among the 54 countries in the African continent, 7 Countries have direct flights to more than 20 African countries, an increase compared to the first quarter 2023 where 4 countries had direct flights toward other countries. Ethiopia is leading with direct services to other countries within Africa.

African Airlines Association (AFRAA) estimates that passenger traffic carried by African operators in 2024 will be about 98 million.

The African Airlines Association is a trade association of African airlines, and is headquartered in Nairobi, Kenya. The primary purpose of AFRAA is to establish and facilitate co-operation between African airlines.

50 airlines comprising of all the major intercontinental African operators and the Association’s members represent over 85% of total international traffic carried by all African airlines.

Source: Kenyan Wallstreet.

EAC Urges Partner States to Fast Track Liberalizing Air Transport Market.

The East African Community (EAC) has urged its partner states to fast track regulations to liberalise the air transport market to boost regional integration and economic growth.

“An integrated air transport market is essential for the development of our region. By removing barriers to air travel, we can enhance competitiveness and attract investment in the region,” The East African Community (EAC) Deputy Secretary General in charge of Infrastructure, Productive, Social and Political Sectors, Andrea Aguer Ariik, said during the 19th Meeting of Director Generals of Civil Aviation and Airports Authorities.

The liberalisation of the market in the region, which has been in the plans since 2006, is expected to lower the cost of air fares, stimulate demand for air traffic, connectivity, increase operation efficiency, reduce the flying time and support the expansion of air transport capacities and the regional economy.

Among other things, the EAC is urging partner states to consider harmonising regulatory fee and charges, and to designate the regional air transport market as domestic for registered air operators in the region.

Only Rwanda and Burundi have submitted their reports on the draft EAC Air Transport Market (Liberalisation) Regulations. The regulations are expected to be submitted to the 19th Meeting of EAC Sectoral Council on Transport, Communication and Meteorology (SC-TCM) for adoption.

Once adopted, and then ratified by Partner States, the air transport market will be liberalised. States will then negotiate bilateral and multilateral arrangements.

Source: Kenyan Wallstreet.

How new routes to global hubs can elevate aviation.

A new study by European aircraft manufacturer Airbus indicates that West Africa holds the potential for an aviation revolution, leveraging its booming population, diverse economies and strategic geographical position to open new routes.

The study, ‘Exploring the horizons: A study of unserved air routes to, from and within Africa,’ highlights that nine out of the top 15 unserved routes start or end in West Africa.

These routes represent significant opportunities for airlines in the region. They include Lagos-New York, Abuja-Nairobi and Dakar-Libreville.

“It is surprising to observe that throughout the entirety of 2023 and up to the conclusion of the IATA-summer in 2024, merely two routes connected Nigeria with North America,” the Airbus study says.

“And both routes were operated by non-Nigerian operators: Lagos-Atlanta, operated by Delta Air Lines, and Lagos-Washington, operated by United Airlines.

“What is particularly remarkable is that during the same period, the whole region of West Africa only had three entry-points in North America: Atlanta, New York and Washington.”

Beyond West Africa, other cities across the continent considered “most appealing unserved routes” link cities such as Cape Town, Nairobi, Dakar and Douala.

At the top of the list of unserved routes in Africa are long-haul intercontinental flights connecting the continent to North America, Europe and the Indian subcontinent.

These routes highlight crucial gaps in air travel, driven by high demand for direct flights from major African cities to global hubs. Currently, passengers endure time-consuming connecting flights, adding unnecessary inconvenience to their journeys.

This is even as projections by the African Airlines Association show African airlines are likely to cross the 100 million passengers mark for the first time in 2025, a sign of the growing traffic volumes in the country’s aviation sector.

Afraa says passenger numbers will hit 98 million by the close of year, which is a 15 per cent increase from 2023, before hitting beyond the 100 million mark by 2025.

Airbus projects a 4.1 per cent annual growth in air traffic over the next 20 years, leading to a demand for 1,180 new aircraft in Africa by 2043.

Despite challenges, the study highlights the potential for greater air travel efficiency through improved connectivity and optimised flight paths, promising reduced travel times and costs.

Notable progress is already underway, with several airlines expanding to cover new routes within Africa and beyond. Ethiopian Airlines is leading the charge, aiming for a 30 per cent growth in passenger numbers by mid-2024.

More foreign airlines are also increasingly expanding into new African routes. For instance, AirAsia, a leading Asian carrier, has announced a direct route to Kuala Lumpur, Malaysia, starting in November.

This new intercontinental route eliminates the need for long layovers, offering travellers an effortless journey between East Africa and Asia.

The ongoing expansions are yielding results, with IATA projecting Africa’s airlines to earn a collective net profit in 2024 for the second consecutive year, showcasing the sector’s impressive post-pandemic resilience.

The Airbus report suggests creating direct long-haul routes between several other key destinations. These include routes from Harare to London, Johannesburg to Mumbai, Entebbe to London, Cape Town to Brussels, Durban to London, and Nairobi to Washington.

The report also proposes flights from Lagos to multiple North American cities, such as Manchester, New York, Toronto and Houston.

While the authors acknowledge that unserved city pairs within the continent rank relatively lower in terms of economic feasibility due to lower traffic numbers, there are promising prospects, such as between the Cape Town-Lagos route.

“Given the pivotal roles played by both Lagos (Nigeria) and Cape Town (South Africa) within their respective countries and across the African continent, the establishment of a non-stop service between these cities emerges as a sensible case,” the authors say.

“Despite the significance of both cities, there is currently no non-stop flight between them. Historical schedule data indicate that such a service has never existed. Moreover, there is no direct air service connecting Cape Town with the entire subregion of West Africa.”

Other high-potential intra-continental routes that the report identifies include Dakar-Libreville, Abidjan-Douala, Abuja-Nairobi and Dakar-Douala.

However, according to experts, efforts to ensure visa-free travel for Africans will create a real impact in easing travel, especially at the regional level.

New South Institute research fellow Alan Hirsch said by the end of 2022, only 27 per cent of African routes allowed visa-free travel for Africans.

“Regularising freer movement of people across African borders is one of the continent’s great developmental challenges. It is one of the flagship projects of the African Union’s Agenda 2063,” he said.

Hirsch is also an emeritus professor at the Nelson Mandela School of Public Governance at the University of Cape Town.

Source: The Star.

Evolution of alternative fuels for aviation.

While the aviation sector will have to overcome huge challenges to achieve its goal of net zero carbon emissions by 2050, the industry has made great strides in its decarbonization journey. The uptake of sustainable aviation fuel (SAF) is growing, with global SAF capacity expected to be nearly 6 billion gallons by 2030 from 1.3 billion gallons in 2023.1 However, today it is severely constrained by the limited availability of alternative aviation fuels that are low in lifecycle carbon, cost-effective, safe, and high-performance.

Although the aviation sector only accounts for just over 2 percent of global energy-related greenhouse gas (GHG) emissions,2 air transportation is growing fast as global populations become wealthier. It means under a business-as-usual scenario, air travel could consume up to 10 percent of the planet’s remaining 1.5°C carbon budget by 2050.3

This report is tailored for leaders and stakeholders in the aviation industry, seeking to offer actionable insights on alternative fuels and a detailed analysis of readiness and adoption potential in the aviation sector.

By using the insights and recommendations provided, aviation organizations can better navigate the complexities of this transition, mitigate associated risks, and capitalize on emerging market opportunities.

alternate fuels readiness factors

Source:    KPMG analysis, “Fueling the energy transition,” 2024.

IATA – Remaining Relevant to Travel Agents

Modern Airline Retailing is an active and important initiative for airlines around the world. But though control of the Offer and Order environment is an essential component in a fiercely competitive industry, IATA is aware that not all airlines have the same set of requirements and distribution strategies.

“This is why the Agency Program is still so important,” says Muhammad Albakri, IATA’s SVP for Financial Settlement and Distribution Services. “IATA accredited agents are trusted distribution partners, and our Agency Program allows airlines and agents to come together to solve challenges and ensure this vital channel remains strong.”

Moreover, the Agency Program fits perfectly with the overall objective of giving customers greater choice. The travel agent is still a vital part of the offer to the customer and has become a hub for consolidating the travel experience. Travel agents are also playing an important role in Modern Airline Retailing as IATA continues to see an increase in NDC transactions in the BSP. 

“Really, they are travel consultancies now,” says Albakri. “They provide an end-to-end service and are now much more than ticket providers.”

In 2023, the travel and tourism sector contributed 9.1% to global GDP and created 27 million new jobs, according to the World Travel and Tourism Council. Airlines are critical to making that happen. And so are travel agents.

In fact, travel agents are still the industry’s strongest distribution channel. The aim, therefore, is to ensure these agents are robust, reliable partners and the process of engagement—whether it is payment or fulfilling passenger requests—is as seamless and cost-effective as possible.

Keeping the program relevant

The most important step was the development of New Generation IATA Settlement Systems (NewGen ISS) approximately five years ago. This introduced different levels of accreditation:

  • Go Global is for large multinational agents and simplifies BSP participation by having a single agreement and a consolidated financial security and Remittance Holding Capacity.
  • Go Standard agents are allowed to sell in cash and other forms of payment.
  • Go Lite agents benefit from not having to furnish financial securities to participate in BSP and are allowed to sell with IATA EasyPay and Credit Cards.

Airlines in turn gained from enhanced risk management and other tools that made the distribution of tickets through travel agents even safer.

“It is not one-size-fits-all anymore,” says Albakri. “Agents can join at an appropriate level of accreditation for their business but still gain from the trust and reach that being accredited brings.”

Supporting the recovery of the industry

After COVID, IATA focused on revamping the accreditation process and streamlining the requirements. The Go Standard agents do not have to go through a financial assessment for the first two years of operation, for example. All told, the changes have resulted in a 50% reduction in accreditation times and a customer satisfaction of 90%.

“We did all this without compromising the risk management criteria,” says Albakri. “In fact, we have enhanced it by adding different compliance reviews, such as PCI DSS (Payment Card Industry Data Security Standard), as a requirement for agencies selling in credit cards, and more robust real-time monitoring of agency sales. But we can improve further both on continuing to strengthen the risk environment and on improving IATA’s service to travel agents by reducing our processing times.”

The improvements in the accreditation process together with the resilience shown by the Agency Program during the pandemic has led to strong demand and growth in accreditation numbers.

“We have also been more present in events and different meetings where travel agents approached us to know more about the benefits of the program and the requirements to become IATA accredited,” says Albakri. “In addition, IATA has historically entered into promotional agreements with different parties to increase the number of Participants and we are fully committed to continuing with this best practice.”

As a result, the number of travel agent codes in the BSP has increased from 54,341 in 2022 to 58,923 codes in April 2024.

For Albakri, this proves that as long as there continues to be a commercial relationship between airlines and travel agents, the program will continue to be extremely valuable.

“Agents will be even more relevant in the future than they were in the past,” he believes. “The Agency program is at the heart of industry resilience because it is a strong, trusted system for distributing and selling tickets and collecting monies. There is also a very low cost of transaction and IATA will continue to improve the service we provide.”

Source:   IATA.

African Aviation Conference 2024: Key Commitments to Enhance Travel and Connectivity.

The African aviation sector reached a significant milestone this week with the conclusion of the African Aviation Conference, held in Addis Ababa, Ethiopia. This pivotal event brought together key stakeholders from across the continent and beyond, including government officials, airline executives, aviation experts, and industry partners. Over three days of intensive discussions, panels, and networking sessions, participants charted a forward-looking vision aimed at transforming Africa’s aviation landscape.

The conference, organised by the African Civil Aviation Commission (AFCAC), was themed “Elevating African Aviation: Innovation, Sustainability, and Connectivity.” It focused on addressing the unique challenges and opportunities within the African aviation industry. In his opening remarks, AFCAC Secretary General Tefera Mekonnen highlighted the sector’s potential to drive economic growth, enhance regional integration, and improve the quality of life for millions of Africans. Key Issues Discussed

Infrastructure Development:

One of the primary topics was the urgent need for infrastructure upgrades. Many African airports and related facilities lag behind global standards, hampering efficiency and safety. Delegates emphasised investments in modernising airports, expanding runways, and enhancing air traffic control systems. Public-private partnerships (PPPs) were identified as a crucial mechanism to mobilise the required funding.

Airline Cooperation and Partnerships:

The conference underscored the importance of cooperation among African airlines. Fragmentation has long been a challenge, with many small national carriers struggling to compete with international giants. The idea of forming strategic alliances and partnerships was championed to enhance competitiveness and expand route networks. The African Airlines Association (AFRAA) proposed initiatives to foster deeper collaboration and resource sharing among member airlines.

Regulatory Harmonisation:

Regulatory fragmentation across different African countries poses a significant barrier to seamless air travel. The implementation of the Single African Air Transport Market (SAATM), a flagship project of the African Union (AU), was a key focus. The initiative aims to create a unified air transport market in Africa, promoting competition and reducing airfares. Conference attendees called for accelerated adoption of SAATM by all AU member states to unlock the full potential of the aviation sector.

Sustainability and Environmental Concerns:

Environmental sustainability emerged as a crucial agenda item. Africa’s aviation industry is not immune to the global push for greener practices. Discussions centred on reducing carbon emissions, adopting sustainable aviation fuels (SAFs), and implementing more efficient flight operations. The International Air Transport Association (IATA) presented a roadmap for African airlines to achieve net-zero carbon emissions by 2050, aligning with global aviation targets.

Technology and Innovation:

Embracing technological advancements was highlighted as a pathway to revolutionise African aviation. From digital ticketing and biometric boarding systems to advanced data analytics for optimising flight operations, technology can enhance the passenger experience and operational efficiency. The conference featured showcases of cutting-edge solutions tailored for the African market, encouraging stakeholders to invest in and adopt these innovations.

Pledges and Commitments

The conference culminated in a series of pledges and commitments aimed at translating the discussions into concrete actions. Some of the key pledges included:

Investment in Infrastructure: Governments and private investors committed to allocating substantial resources towards upgrading and expanding airport infrastructure. This includes modernising terminals, enhancing cargo facilities, and improving air navigation services.

Enhanced Collaboration: African airlines vowed to work more closely through codeshare agreements, joint ventures, and shared services to enhance connectivity and operational efficiency. The establishment of an African aviation alliance was proposed to foster deeper cooperation.

Regulatory Reforms: Several countries pledged to expedite the implementation of SAATM, aligning their regulatory frameworks to facilitate a single aviation market. AFCAC committed to providing technical support and capacity-building programs to assist member states in this transition.

Sustainability Initiatives: Airlines and aviation authorities committed to adopting environmentally sustainable practices. This includes investing in SAFs, optimising flight routes to reduce fuel consumption, and implementing carbon offset programs.

Technological Adoption: Stakeholders pledged to embrace digital transformation, investing in technologies that improve safety, efficiency, and the passenger experience. This includes enhancing cybersecurity measures to protect against emerging threats.

Looking Ahead

The African Aviation Conference marked a significant step towards a more connected, efficient, and sustainable aviation sector in Africa. However, the real challenge lies in turning these pledges into reality. Continuous collaboration, investment, and innovation will be essential to overcoming the obstacles and realising the vision outlined during the conference.

As the conference concluded, there was a palpable sense of optimism and determination among the delegates. With the right strategies and concerted efforts, Africa’s aviation industry has the potential to soar to new heights, driving economic growth and improving the lives of millions across the continent. The future of African aviation looks promising, and the commitments made at this conference provide a strong foundation for the journey ahead.

Source: Tekedia.