The African aviation market has always been promising and filled with opportunities, yet operating in this environment is challenging. It is a fast-growing market in which air connectivity went up by 30% from 2014 to 2019. Africa has a large, young workforce that can drive economic growth and which brings velocity to digital innovations. The continent has skipped certain stages of digitalization and jumped right into the mobile world. Coupled with the entrepreneurial spirit seen across the continent, African travelers have adopted smart, digital solution such as micro money platforms.
African Airlines were hit hard by the pandemic with capacity dropping to 20% or less of 2019 levels. Most are planning to produce below 80% levels compared to 2019 by the end of 2021. African Airlines are facing the questions of how they can use this crisis as an opportunity to transform their business model. In their search for answers, airline managers need to take an investors perspective on their own enterprise and evaluate two main dimensions.
First, how future-ready is their business model and was it working before COVID-19 struck? Secondly, will it work in the post COVID environment where so much has changed? Depending on the answer, airline managers need to evaluate whether implementing balance-sheet optimizing and cash-saving measures will be sufficient or whether a transformation of the business model is necessary.
Lufthansa Consulting advises airlines to take action in 6 key areas in order to shape their business model, effectively fulfil their goals and become a “master of survival”.
Watch the presentation by Matthias Kern: "The future of airline business models for Africa post-Covid" which he held at the African Airlines Association (AFRAA) 9th Aviation Stakeholders Convention
Further insights from Lufthansa Consulting’s aviation experts are available here