Did everyone just forget about Africa?

Sub-Saharan African economies are expected to grow five percent this year following similar growth rates last year

I used to dread flying back to Slovenia for Christmas every year to visit the in-laws. Don’t get me wrong — bizarrely I get on with all of them. It was just the thought of having to fly Turkish Airlines (THY).

Four years ago, when I started making the marathon journey from Dubai to Istanbul to Ljubljana, not a trip went by without drama. Istanbul’s main airport was chaos, each flight was always delayed, connections were missed, and just for good measure, the service standards on Turkish Airlines were, in my opinion, appalling.

Four years on, and I can’t find fault with anything about the airline — delays have disappeared, the planes look brand new and the service is fabulous. As my colleague Massoud Derhally’s interview with Turkish Airlines CEO Temel Kotil in this week’s issue shows, the airline is also in pretty decent financial shape.

The airline carried 18 million passengers in the first six months of the year, about 20 percent more from the same period a year earlier. Its passenger load factor in the period was 75.2 percent and it posted a net profit of 193.1 million lira ($105m) in the second quarter compared with a 170 million lira loss in the same period a year earlier. Today Turkish Airlines is the third-largest airline in Europe by passenger traffic and has 1,000 flights a day, a number it seeks to double over the next ten years. The carrier currently flies to 203 destinations and has a fleet of 200 aircraft.

Two things are striking about the growth. One is that unlike many of the big guns that are chasing (and waiting) for deliveries of the A380, Turkish Airlines is mostly made up of narrow-body jets — and it’s likely to make new plane orders within the next eighteen months.

More interesting, though, is Kotil’s focus on Africa — again, while rivals are targeting South America and Asia, Kotil is looking south, and plans to increase his destinations to the continent from 24 to 34.

 “I need just 100 passengers from Kinshasa to Istanbul to make a profit,” Kotil  tells us, adding, “Other airlines need 200. So Istanbul will be the capital of the airline business.”

THY also has a presence in Mogadishu, the capital of war-torn Somalia.

“It looks maybe strange but Somalia is an underserved country...We love it, we’re making good profit from Mogadishu,” he adds.

Sub-Saharan African economies are expected to grow five percent this year following similar growth rates last year and 2010, according to the International Monetary Fund. The region’s economies are expected to accelerate to 5.7 percent next year. As Kotil explains: “Africa is the future, after 100 years Africa will be the most important continent on earth. We need to fly to every major city in Africa. Airlines in Africa are also coming out. After five to ten years Africa will have nice small airlines to mid-sized airlines... In the near future we will become the most important player in Africa.”

He’s not alone. Aramex boss Fadi Ghandour’s  statement last week showed a decent eleven percent rise in third-quarter profits, thanks in part to its South African operations. Just over a year ago, Emaar chairman Mohamed Alabbar told this magazine about his plans to create a $1bn mining empire in Africa, through his new venture Africa Middle East Resources (AMER).

As he explained at the time: “Call it unstable, call it risky, call it whatever you want to call it. If it’s unstable or it’s risky don’t go there. Why should you bother? Well I like to bother, I’m spending a lot of time there. Is it easy? No way, it’s not easy. But I know what can be done.”

The likes of Fadi Ghandour, Mohamed Alabbar and Temil Kotil are however, the exception to the rule. The rest of the pack could do worse than take a leaf out of their books.

Anil Bhoyrul is the Editorial Director of Arabian Business.

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Posted by: Peter Cooper

For most people life is too short to risk it in Africa! Tanzania and Botswana are the model countries. Nigeria and Somalia show the other extreme, and South Africa looks to be finally falling apart though it has shown a great capacity for survival. Libya is finding the democratic transition challenging and so is the most populous nation Egypt. Is Africa rising or falling at the moment? That you can even ask that question tells you a lot. The answer is that Africa is a big place and it depends where you go. Emirates Airline is also expanding its network in Africa, THY is getting into the smaller destinations early.

Posted by: Roscoe roos

The growth in South African tourism industry is booming. Not to talk about 5 to 10 years from now, the figures will be nice and fat. Arrivals are increasing annually and showing no sign of declining. The map better be ready for South Africa esp Cape Town!!

Posted by: John

What a doos, Roscoe roos. This cheerleading for SA is against all facts.

Posted by: Roscoe Tanner

You are talking rubbish in terms of South Africa. 'Steep decline'? Economy is growing by 2-3% this year with further growth rates projected in a 5 year period. If that is steep decline then Europe is way past the abyss. Obviously growth rates are not as steep as surrounding countries, then again SA is a much more mature and saturated economy. SA does have serious challenges, however there is plenty of potential, room for growth and an infrastructure MILES above any other country in Africa. Please read Paul Harris' letter 'Don't Stress About Us in SA' posted recently in media across the world.

Posted by: John

It has often been said that "Africa is not for sissies" and doing business on the continent requires nerves of steel, deep pockets and a very large dose of patience, not to mention an enormous sense of humour. Sadly South Africa is now in steep decline, due to corruption, inept leadership and iniquities from the apartheid years, but many other countries are on the up. In many countries, excluding South Africa, education is of paramount importance. Natural resources are abundant and tourism hasn't even been tapped. "ex africa semper aliquid novi."

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