Outlook for global airline alliances in Africa

As global alliances gather momentum, radiating from their core partners in Europe and North America, each region is experiencing the influence that the groupings can bring. Africa is no exception, but the lack of fully viable locally based carriers offers something of a challenge in finding partners to expand beyond the small number already accounted for.

Nonetheless, the role of global alliances seems sure to increase competition on the African continent. But whether this will improve on the current north-south route bias is doubtful; in fact, the opposite is possibly the likely outcome.

When EgyptAir joined Star Alliance in 2008, Jan Albrecht, CEO of the Alliance, was bullish about Africa’s aviation future: “half of our members (are) flying to the African continent…The economic and business climate of Africa is getting the world’s attention.” He also believed the “Star Alliance is well positioned to serve the business interests of the continent by having EgyptAir in the north, South African Airways in the south, and nine other member airlines flying to Africa.”

It does look that way, as Star appears best established – numerically, at least, of any of the alliances. Both of continental Europe’s major airlines, Air France-KLM and Lufthansa, have extensive links to and from Europe in their own right. British Airways, a lead member of the third global alliance, also has its own network, albeit smaller than the other two.

Unaligned Emirates Airline is expanding its presence too, providing links from Europe and Asia. The UAE carrier has created a sufficient threat to Europe-Africa operations that Lufthansa last year felt the need to take legal action to prevent Emirates from price leading on Germany-South Africa routes.

As the underdeveloped African market grows, the competition among offshore airlines will only intensify, with increasing benefits for African consumers and for intercontinental trade flows.

Meanwhile, although Asian and European connections are well developed, American carrier direct links remain rare, with only SkyTeam’s Delta actually currently operating; the carrier flies between Atlanta and Accra, Lagos, Johannesburg and Cairo and from New York JFK to Accra, Cairo, Dakar and Lagos, with a codeshare on Royal Air Maroc’s metal to Casablanca. United is to commence its own Chicago-Accra service in Jun-2010 (and possibly extended to Lagos), currently codesharing on EgyptAir services between Cairo and JFK and on SAA’s between Chicago and JFK-Johannesburg. Meanwhile the bulk of the access, particularly to northern Africa, is over European gateways.

In the absence of a wide range of locally available partners, the core European airline services will persist strongly, with a large portion of long haul passengers connecting over Europe to access African points. But, as noted, Star Alliance has taken the initiative in capturing some of Africa’s more eligible partners, EgyptAir, Ethiopian Airlines and South African Airways, while the Dutch part of the SkyTeam leaders has an established relationship with east Africa’s Kenya Airways; this offers a useful complement to Air France’s longstanding links with the north African francophone airlines.

In terms of coverage, Sky Team, of the global groupings, would appear to have the most comprehensive airline partnerships in the continent. The following summarises many of those relationships for each alliance.

(1) SkyTeam: a powerful set of connections from Europe

Air France/KLM is thus particularly strong in Africa in its own right, thanks to a combination of the longstanding French colonial links and the substantial access that KLM has established to mostly English speaking nations. Delta has been on-again/off-again in its entry to Nairobi, although there are hopes of a connection, probably via the west coast of Africa, later in 2010.

The Air France-KLM coverage however enables the SkyTeam combination to dominate European access to the continent, from north to south and from east to west, with a total of 42 destinations across 33 African countries. Access has also been augmented by regional alliances established, for example, through KLM’s alliance an equity holding in Kenya Airways.

Air France-KLM’s African route network

Source: Air France

Combined with the Kenya Airways network, the strength of the alliance in southern Africa is also greatly enhanced.

Kenya Airways’ African route network

Source: Kenya Airways

Also, as noted below, Air Algerie is in the process of becoming a SkyTeam member, although it has not yet complied with the necessary criteria.

Royal Air Maroc has one foot in the alliance also, with close commercial links to both Air France and US SkyTeam’s Delta, and Tunisair also has had a long term relationship with Air France.

This is an extract from an article, available for CAPA Members, or by individual purchase, that includes the following sections/data:

• (2) Star Alliance: greater partner presence on the continent
  
  
  
  • Lufthansa’s African route network
    
  • South African Airways’ African route network
    
  • EgyptAir’s African route network
    
  • Turkish Airlines’ African route network A galaxy of Stars
    
• (3) oneworld: the most modest alliance player in Africa
  
  
  
  • British Airways’ African network, with Comair route network in southern Africa
    
  • Iberia’s African network
    
• Potential alliance members: limited options remain
  
  
  
  • Key data for selected African airlines: Home country capacity, Fleet (current and orders) and Capacity share of African continental market
    
• Royal Air Maroc prospects
  
• Arik Air prospects
  
• Tunisair prospects
  
• Remaining options? Only Nigeria an obvious target
  
• Conclusion: An uncertain impact from the alliances 

 Source: CAPA