The African market for internal and international air travel is growing. Boston Consulting Group predicts average annual growth at 6.2% during the next 10 years.
In an article in the UK’s Daily Mail newspaper (link below), Bertrand Mouly-Aigrot, an air transport expert at Archery Strategy Consulting, explains that: “Today, Africa accounts for just a small portion of global air traffic: less than 3 percent of passengers when it has 15 percent of the world’s population. Thus… there is considerable development potential.”
“It has been a challenging time for African airlines,” confirms Milanamos’ Christophe Ritter. “Better funded airlines from Europe and the Middle East are winning customers for international travel, and local airlines face high operational costs for internal traffic.”
“Of course the cost challenges for ‘local’ airlines in Africa are exacerbated by the sheer size of the continent,” Ritter continues. “An inter-city hop from London to Paris is under 350km, but Cairo to Nairobi, for example, would be ten times that distance. The scale of the challenge is completely different.”
AFRAA uses big data for competitive advantage.
AFRAA is the African Airlines Association. Their mission is to coordinate the interests of all member airlines. “One of the big challenges African Airlines face,” says Mrabet Koussai, the Director of Commercial and Industry Affairs at AFRAA, “is that the international carriers can afford to effectively buy market share and win the most profitable intercontinental traffic.
It’s hard for our members on their own to compete, but we found that big data and collaboration between competitors will enable African national and regional airlines to work together in order to offer desirable and viable services.”
Now AFRAA are fighting to increase the market share for their members, and big data is an important part of their strategy.
Ritter says that collaboration is a key enabler for African airlines. “When smaller airlines work together and use big data to understand customer requirements, they can create innovative inter-connect services and leverage the maximum value from their resources.”
Ritter adds that in March 2015, AFRAA awarded Milanamos the ‘Route Network Steering Committee’ project. This project has four key goals:
1. Coordinate and harmonise flight schedules with the view to propose alternative cost-effective schedules that will generate increased load factors and revenue.
2. Improve intra-African connectivity and increase flight frequencies, as well as offer flexibility to travellers.
3. Reduce travel time, minimise passenger layover (hotel accommodation) and assist airlines to realise synergy through collaborative network development.
4. Encourage cooperation through code-share, interline, Special Pro-rate Agreements (SPAs) and other such commercial arrangements to estimate revenue per member airline on codeshares and SPA agreements.
Ritter says that any member of AFRAA can take part in this program. “Big data from multiple sources gives very granular insights into customer behavior and market demand,” Ritter says, “and our proprietary predictive analytics enables companies to estimate traffic, even where there is no historical passenger data to work with.”
Ritter continues that Milanamos will initially work on identifying potentially profitable new airport connections, rationalizing networks and timetable for participating airlines, and carrying out demand and revenue/cost analyses. “The more airlines that take part in the project, the more successful the project will be,” Ritter explained. “Collaborative marketing gets stronger as more companies securely share their relevant data using our unique skills, platform and insights dashboard.”
Research link:
Daily Mail newspaper.
http://www.dailymail.co.uk/wires/afp/article-3098778/African-air-travel-primed-off.html
