Flights from US to Africa open up business frontiers
By Doug Cameron
Financial Times
August 29, 2006
Linda Perniciaro took the Houston Express to work last month. The Texas oil capital is not renowned for its public transport, and the Express is in fact a converted MD-11 jet flying three times a week to Luanda.
Ms Perniciaro's 14-hour journey to oil-rich Angola on an aircraft kitted out with business-class seats and personal TVs represents the plusher end of the expanding market for airline services between the US and Africa.
However, the mother-of-two admits she would not have made the journey to provide computer training for an energy client had she been forced to rely on the limited number of direct services between the continents. Most passengers face a gruelling 24-plus hour trip with a stop in Europe.
The additional security restrictions after British authorities claimed to have foiled a plot to blow up airlines heading to the US, add to the discomfort facing transfer passengers, though airlines maintain that international bookings remain in line with expectations, in spiteof the recent disruption.
There are just a handful of non-stop flights between the US and Africa – most operated by non-US carriers. Despite the high-margin business traffic created by rising oil and gas production in west Africa and initiatives to boost trade such as the US-African Growth and Opportunity Act, "it's not easy to get there right now", says Glen Hauenstein, the executive vice-president in charge of network development at Delta Air Lines. Delta plans to start a service from its Atlanta hub to Johannesburg in December, with a stop in Dakar, the Senegalese capital. This would make it the first major US carrier to tap the region since the disappearance of Pan Am and TWA more than a decade ago.
"Africa-US is growing much faster than even Asia. It's outpacing every other region," says Mr Hauenstein. He notes that passenger traffic is rising at 14 per cent a year, well above the 2.7 per cent growth in official statistics based on the limited number of non-stop flights.
"West Africa is the most underserved," says Robert Binns, chief marketing officer at World Airways, which operates the thrice-weekly Houston Express charter. The shortage of seats has been exacerbated by the collapse of African carriers such as Nigeria Airways, and the failure of subsequent attempts to revive other struggling flag carriers in the region.
World – also the largest commercial operator for the US military – spotted African opportunities when it acquired North American Airlines, a New York-based rival, last year. The airline started its scheduled African service in July 2005, with flights to Accra. It has since tripled the frequency and added Banjul in the Gambia and, last month, Lagos.
Mr Binns says 130,000 passengers a year fly to Lagos from the New York area alone, with another 80,000 heading to Ghana, highlighting the large ethnic African populations in the US which provide the bulk of its passenger base. Mr Binns says the reluctance of US carriers to serve the market reflects perceptions that Africa is a more difficult operating environment, but one in which World – which flies to Iraq and Afghanistan for the military – is well equipped for.
"It's not just Houston," says Mr Hauenstein, referring to the traffic generated by the energy business. "It's the United Nations, aid relief, visiting friends and relatives. And Africa is the next frontier for tourism."
Delta is the only major US carrier planning Africa services, with rivals opting instead to feed passengers via their alliance partners in Europe. "US airlines have lost their imagination," says Mr Hauenstein. While admitting he is unsure as to how profitable the new Dakar-Johannesburg route will be, he identifies Cairo, Casablanca and Nairobi as potentially attractive destinations, alongside the oil-rich nations of west Africa.
For its part, Virgin Nigeria says its application remains on hold since being filed with the US authorities last December. Dave Schaffer, the carrier's US counsel, believes the airline's UK link has made it a hostage to the long-suffering efforts to liberalise aviation links between the US and Europe.
By Doug Cameron
Financial Times
August 29, 2006
Linda Perniciaro took the Houston Express to work last month. The Texas oil capital is not renowned for its public transport, and the Express is in fact a converted MD-11 jet flying three times a week to Luanda.
Ms Perniciaro's 14-hour journey to oil-rich Angola on an aircraft kitted out with business-class seats and personal TVs represents the plusher end of the expanding market for airline services between the US and Africa.
However, the mother-of-two admits she would not have made the journey to provide computer training for an energy client had she been forced to rely on the limited number of direct services between the continents. Most passengers face a gruelling 24-plus hour trip with a stop in Europe.
The additional security restrictions after British authorities claimed to have foiled a plot to blow up airlines heading to the US, add to the discomfort facing transfer passengers, though airlines maintain that international bookings remain in line with expectations, in spiteof the recent disruption.
There are just a handful of non-stop flights between the US and Africa – most operated by non-US carriers. Despite the high-margin business traffic created by rising oil and gas production in west Africa and initiatives to boost trade such as the US-African Growth and Opportunity Act, "it's not easy to get there right now", says Glen Hauenstein, the executive vice-president in charge of network development at Delta Air Lines. Delta plans to start a service from its Atlanta hub to Johannesburg in December, with a stop in Dakar, the Senegalese capital. This would make it the first major US carrier to tap the region since the disappearance of Pan Am and TWA more than a decade ago.
"Africa-US is growing much faster than even Asia. It's outpacing every other region," says Mr Hauenstein. He notes that passenger traffic is rising at 14 per cent a year, well above the 2.7 per cent growth in official statistics based on the limited number of non-stop flights.
"West Africa is the most underserved," says Robert Binns, chief marketing officer at World Airways, which operates the thrice-weekly Houston Express charter. The shortage of seats has been exacerbated by the collapse of African carriers such as Nigeria Airways, and the failure of subsequent attempts to revive other struggling flag carriers in the region.
World – also the largest commercial operator for the US military – spotted African opportunities when it acquired North American Airlines, a New York-based rival, last year. The airline started its scheduled African service in July 2005, with flights to Accra. It has since tripled the frequency and added Banjul in the Gambia and, last month, Lagos.
Mr Binns says 130,000 passengers a year fly to Lagos from the New York area alone, with another 80,000 heading to Ghana, highlighting the large ethnic African populations in the US which provide the bulk of its passenger base. Mr Binns says the reluctance of US carriers to serve the market reflects perceptions that Africa is a more difficult operating environment, but one in which World – which flies to Iraq and Afghanistan for the military – is well equipped for.
"It's not just Houston," says Mr Hauenstein, referring to the traffic generated by the energy business. "It's the United Nations, aid relief, visiting friends and relatives. And Africa is the next frontier for tourism."
Delta is the only major US carrier planning Africa services, with rivals opting instead to feed passengers via their alliance partners in Europe. "US airlines have lost their imagination," says Mr Hauenstein. While admitting he is unsure as to how profitable the new Dakar-Johannesburg route will be, he identifies Cairo, Casablanca and Nairobi as potentially attractive destinations, alongside the oil-rich nations of west Africa.
For its part, Virgin Nigeria says its application remains on hold since being filed with the US authorities last December. Dave Schaffer, the carrier's US counsel, believes the airline's UK link has made it a hostage to the long-suffering efforts to liberalise aviation links between the US and Europe.
