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Rapidly growing African MRO market poses new challenges

2020-09-09 / 2 min
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In the short run most African airlines are planning on both rapidly renewing and expanding their existing fleets. Introducing such new generation aircraft as B737, B777 or B787 Dreamliner will result in massive maintenance service improvements and a much higher demand for more effective technical personnel and pilot training solutions. According to Locatory.com experts, the foreseen aviation market growth within the continent will largely depend on similar factors affecting other emerging markets. These include well-run cooperation with foreign partners and suppliers as well as a streamlined aviation spare parts and components’ import system.

The current aircraft maintenance and repair sector in the African market is valued at approx. USD 1.2 billion. Aviation experts expect that in the next decade this amount will increase by almost 40%. Despite these prognosis that are based on global tendencies, Locatory.com maintains that the growth pace in Africa will not match the one expected in the Asian aviation market.

‘Although Africa is becoming increasingly attractive to investors several factors still stand in the way of major developments. The market is still restricted by the lack of proper infrastructure. Furthermore, such problems as air space restrictions, obsolescent fleet, specialist emigration, bureaucratic interference, high operating costs, stiff prices and lack of cooperation experience prevent Africa from realising its full aviation expansion potential.’, – explained Chief Commercial Officer of Locatory.com Vytautas Vorobjovas.

Although Africa is becoming increasingly attractive to investors several factors still stand in the way of major developments

In 2009 78% of all intercontinental flights were operated by non-African airlines. Currently the region is mainly served by European carriers; however experts have recently observed an increased interest from the Near East aviation services providers. According to the 2010 data 35 airlines that belong to the African Airlines Association operate a fleet consisting of 503 aircraft a third of which are older than 20 years of age.

Aviation sector development will bring about a considerably higher demand in aircraft maintenance services. According to Team SAI, until 2016 the global market expenditure on MRO components will reach USD 10.1 billion while engine management services will add up to USD 27.1 billion. Currently the expenditure on these in Africa amount to a mere 1.7% of the entire global aircraft maintenance costs. In 2020 the aviation parts demand is expected to reach USD 34 billion; therefore the African spare parts market should rise from USD 0.9 billion (2010) to USD 1.2 billion (2020).

Locatory.com experts point out that aviation spare parts platforms are still considerably less popular in Africa than they are in the remaining parts of the world. Such sluggish progress is mainly determined by internet connection issues, differences in payment systems as well as Europe and the USA-imposed government regulations.

‘A faster integration into aviation spare parts platform system could significantly accelerate the African aviation sector development. In order to start cutting down on expenditure without compromising on quality and effectiveness African airlines must seek to apply spare parts supply innovations, outsourcing and new generation technologies. Currently the supply chain devours 60-90% of all costs but even the slightest 2% increase in the process effectiveness could result in 3000-5000% improvement in cost optimization as opposed to 2% increase in IT, human resources, finance and sales effectiveness.’, – says V.Vorobjovas.

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