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Published on : Wednesday, July 13, 2016
However, economists are doubtful about the strength of regional air travel’s demand and are trying to make sense of the government’s decision to invest sums in the organizations that are running on losses.
The expansion in air travel would result in great stress for Fastjet, South African Airways as, Kenya Airways as well as Ethiopian Airlines. Fastjet is an economical carrier that had been launched in the year 2012 but the scarce number of passengers pummeled its growth.
A capital raising is on the cards for Kenya Airways in which the regional government of Africa is the largest stakeholder since it has a 29 percent stake in this company. The South African Airways is owned by the state government and hence it depends on government aid for keeping itself operational.
Yoweri Museveni, president, Uganda said in a cabinet meeting that his aim was to restore the Uganda Airlines that had become completely bankrupt during 2001 and was compelled to stop its operations.
He said that the travelers of Uganda were suffering in the absence of a national airline. And he added that the economy of East Africa was progressing as compared to the one 15 years ago.
Last month, the government of John Magulufi in Tanzania had set aside funds for Air Tanzania. Air Tanzania already has an aircraft, but the government of Tanzania wants to acquire two additional aircrafts.
During September and November, RwandAir would take the delivery of two Airbus jets. This airliners already owns eight aircrafts.
Middle East and European carriers would also be expanding their operations in the region of Africa.
Last month, Lufthansa had declared that it would increase the number of weekly flights to Nairobi from Frankfurt and would also utilize a larger aircraft.
Spokespersons of Lufthansa has asserted that the estimates of the International Air Transport Association (IATA) indicate that Africa would boast of being one of the swiftest growing aviation markets within the following 20 years. Uganda, Tanzania, Rwanda and Ethiopia are amongst the leading markets.
IATA has also predicted that the number of passengers in Africa’s airlines would grow by 4.7 percent every year. At the same time it has also said that African carriers would record a loss of about $500 million in 2016 compared to $600 in 2015.