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ACMI Summer Overview – Africa

While the European market struggled to keep its head above the water with resourcing issues, the African ACMI market made considerable strides in 2022. The year started with solid projections...

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Andreas Pericleous

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While the European market struggled to keep its head above the water with resourcing issues, the African ACMI market made considerable strides in 2022.

The year started with solid projections of rising passenger demand across the continent, following the dramatic drop in passenger traffic during the Covid-19 pandemic. These predictions were proven when the summer season commenced, and the African passenger ACMI market hummed with activity.

Many carriers doubled down well in advance of the busy summer 2022 season and secured ACMI capacity at relatively favourable rates. However, the increase in activity was anything but a secret and ACMI rates steadily increased.

It’s worth noting that the African continent spans two hemispheres, so the seasonal patterns between the north and the south are different. The summer peak season in the northern countries runs in parallel to European summer, while the countries of the south see their peak during the European winter. Effectively, Africa has two peak seasons, which directly impacts the ACMI demand, the supply of available capacity and the focus of operations of ACMI providers during different periods of time.

African aviation is rife with challenges. The continent is comprised of 54 countries, and while projects such as Open Skies attempt to unify and coordinate aviation, restrictive policies and outdated legislation impede market development. Despite growing passenger numbers, aviation in Africa remains a luxury, as the majority of the population cannot afford air travel. As such, government policies need to adapt further and address the necessity of making air transport a commodity that is available to a greater portion of the population.

Despite the existing challenges, African carriers welcomed more and more passengers in 2022, eventually operating load factors above pre-pandemic levels. For many, this signals more than just a lucrative year, but a kickstart to the African travel market which is preparing for a healthy outlook for 2023 and beyond.

While passenger carriers were enjoying a solid year for air travel, cargo operators, too, saw increased activity across the continent. Primarily driven by rising commodity prices, cargo operations became increasingly lucrative, allowing for a sound freighter ACMI demand throughout the year.

THE ACMI MARKET IN AFRICA

The aviation market in Africa has a unique set of challenges, and for many, ACMI sits at the heart of development plans. As observed during the chaotic European summer season, ACMI is an essential tool that enables carriers to capitalise on market demand, while limiting financial exposure. Additionally, as the market is relatively fragmented and there are not many significant carriers which would dominate the market, small airlines are utilising ACMI capacity to chip away at market share and grow their position.

However, despite the demand for ACMI, many European operators tend to keep operations closer to home, and there are only a handful of local ACMI operators within the continent. If the market is to develop, more floating capacity must be available from ACMI providers from across different geographical regions who need to be interested and willing to operate in Africa.

CONTACT ACC AVIATION

Throughout 2022, ACC’s African ACMI team has worked with all manner of ACMI clients – from local and international passenger carriers, cargo carriers, ACMI suppliers and state-owned operators. In August, the team organised the ACMI of a narrowbody Boeing B737-800 on behalf of an African flag carrier.

For twenty years, ACC has been renowned for its market-leading leasing solutions. Our in-depth and in-house knowledge of the aviation market and our global operator networks enable us to provide leasing services unmatched elsewhere in the industry.

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