BOEING SEES PROSPECTS IN AFRICA'S COMMERCIAL AVIATION

santossJoão Miguel Santos is the Managing Director, Sub-Sahara Africa for Boeing International, and Director, International Sales - Africa, Boeing Commercial Airplanes. He shares his deep insight on the African aircraft market, highlighting some of the most intriguing aspects of the continent's emerging aviation industry in this exclusive interview with Aviation & Allied Business.

Q: You have been the Managing Director Sub-Sahara Africa, Boeing International since 2012, and Director, International Sales Africa, Boeing Commercial Airplanes, 2000. What has been your experience on the continent?

A: My first job as a Weather Analyst also took place in Luanda when I worked for the Weather Bureau at Luanda International Airport. It is also in Luanda that I earned my private pilot license.

I have worked in Africa on or off since almost the beginning of my career. I have been a Director International Sales Africa Boeing Commercial Airplanes since 2000 and, more recently, I was appointed Managing Director Boeing International in 2012 where I manage Boeing relationships with government entities, customers, suppliers, business partners and support the activities of Boeing business units - namely Boeing Commercial Airplanes, Boeing Defence and Security, Boeing Capital Corporation and the newly formed Boeing Global Services in Africa.

As Director International Sales for Africa for Boeing Commercial Airplanes, I manage sales activities for all Southern Africa countries including Angola, South Africa, Réunion, Madagascar, Mozambique and Zimbabwe.

Q: African governments agreed to implement liberalization of African skies in 2017. What does this mean for Boeing as a key aircraft maker serving the continent?

A: The Yamoussoukro Decision (YD) needs to be implemented first and foremost within the continent to allow markets to develop and African airlines to strengthen their market position. Once that happens then full Open Skies could be undertaken. An open sky policy in Africa should lead to the weeding out of uncompetitive carriers, greater competition between airlines, the opening up of new routes and revitalizing the aviation industry across the board and a much lower fare cost structure available to customers which will also contribute to stimulate travel growth. It should bring new opportunities for aircraft manufacturers such as Boeing to introduce its newest and most fuel-efficient, economical and technologically advanced aircraft.

Q: After sales support remains a challenge in Africa. How do you think this can be tamed?

A: To enable airlines and leasing companies to operate more efficiently, Boeing is changing the way we support customers. Through Boeing Commercial Aviation Services and the newly formed Boeing Global Services unit, the company provides unsurpassed, around-the-clock support and services to help operators maintain their airplanes in peak operating condition. We tailor our offerings to suit the needs of each customer. We know that one size does not fit all and that each customer has a unique business model. Boeing works very closely with each individual airlines to develop a service package that addresses the airline's current and future needs. Our portfolio of services is vast and flexible to meet the needs of every airline, and if relevant, the leasing companies. For nearly 100 years, our mission has been to enable safe and efficient operations for our customers.

Q: Africa has a high percentage of older aircraft which creates the potential for fleet renewal and upgrade. With the presence of more and even new aircraft brands to serve the regional market such as Chinese and Russian brands, etc., how do you hope to strengthen Boeing's foothold in the African market?

A: The perception that Africa has a higher percentage of older aircraft and that it is the "dumping ground" for older aircraft is no longer true.  Over the past 5 years, airlines such as Air Austral, Ethiopian Airlines, TAAG Angola Airlines, COMAIR/Kulula, Kenya Airways, Royal Air Maroc, RwandAir, South African Airways and Air Mauritius have taken delivery of many new aircraft. These airlines have realized that the only way they can effectively compete in the marketplace is with new products that substantially lower their operating costs, increase Dispatch Reliability and provide the comfort that the marketplace and passengers demand today.  It is also these new airplanes that provide the equity assets that airlines need to continue to grow and expand.

However, we always want to find ways to increase our market share where we can. One of the steps to achieving that has been to open two new offices in Johannesburg, South Africa and Nairobi, Kenya this year. Whilst Africa is not a new territory for Boeing, we feel that the aerospace industry needs to start paying closer attention to Africa, because this continent is clearly on the move economically and all the trends are pointing in the right direction for the expansion of the sector.

Indicators show that GDP will continue to grow by almost 5 percent annually over the next decade with Boeing's most recent Current Market Outlook report predicting that air traffic to and from Africa is expected to grow by about 6.1% annually over the next 20 years, resulting in the need for 1,150 new airplanes.

Q: The B787 Dreamliner has been received with much excitement in Africa. How has the aircraft performed among African operators, and what is the prospect of the 737MAX in Africa?

A: The B787 is an airplane with unparalleled performance, delivering unmatched fuel efficiency with advanced technologies on the airplane contributing to a 20 to 25 per cent improvement in fuel burn and 40% lower maintenance costs when compared to the airplanes it replaces. The key to this exceptional performance is a revolutionary design which includes using lightweight carbon fibre composite materials which make up 50 per cent of the primary structure of the 787, including fuselage and wing and a modern system architecture that is simpler, more functional and more efficient than that of other airplanes.

The 737 MAX will offer more value than any competitor in the single-aisle market with an 8 percent per seat operating cost advantage in the heart of the single-aisle market versus its nearest competitor. It builds on the success of the Next-Generation 737 - retaining efficiency, economics, the highest reliability of any aircraft in our industry and passenger appeal and will be as big a success as the 787 has been once it launches on the continent.

Q: Boeing has aviation biofuel collaboration with South African Airways. What progress has been made so far on this project and how realizable are its benefits?

A: SAA and Boeing announced in October 2013 that we would work together to develop a sustainable aviation biofuel supply chain in Southern Africa. In March 2014, Boeing and SAA announced a collaboration with the Roundtable on Sustainable Biomaterials to position small-hold farmers in the region to tap into demand for biofuel feedstock, starting with a nicotine-free plant called "Solaris". In July 2016, SAA and its subsidiary, Mango, flew two passenger flights powered by a 30 percent blend of the biofuel, which is certified for commercial use. These were Africa's first biofuel demonstration flights.

Boeing also launched the Southern Africa Sustainable Fuel Initiative (SASFI) to identify new opportunities and new biomass in that region, which is part of our efforts on six continents to continue commercializing aviation biofuel. Based on information developed through this project and our test farms, our shared goal is to scale up a "Solaris"-to-biofuel supply in the Southern Africa region and  research a portfolio of other biomass options. It will also be important to raise further capital to invest in the fuel-processing infrastructure in the region. Since Boeing led the approval of the first aviation biofuel in 2011, more than 5,000 commercial flights around the world have flown on a biofuel blend.

Q: What is your outlook for Boeing airplanes in Africa over the next 5-10 years, and what is your word to African operators?

A: Africa remains a relatively small aerospace market compared to several other regions. Despite this we see extraordinary potential in the coming decades.

As I have mentioned, indicators show that GDP will continue to grow by almost 5 percent annually over the next decade. Africa will need this robust growth because it has the youngest population of any continent and 11 million people are expected to join the job market annually for the next 10 years.

Urbanization also plays an important role in this transformation. Over the past 25 years Africa's urban population has grown annually by 3.5 percent, the highest in the world. Over the next 25 years, African cities are projected to add more than 500 million people - twice as many as rural areas over the same period.

These are all key indicators to watch for the aerospace business as our future is closely tied to macro-economic and demographic trends that affect consumer income and quality of life. As we've seen in Asia, and China in particular, when the economy improves, more people move to the cities and the population buys more goods and services from abroad.

When trade grows, companies ship more goods - often by air. When people have more disposable income it follows that they have the ability to travel by air to visit family, conduct business and go on holidays.

What does all this mean for Africa's commercial aviation market? Effective governance, liberalization of the skies, continued progress on transportation infrastructure are all critical ingredients that Boeing considers when analyzing the prospects for commercial aviation in Africa. These future estimates are published annually in what we call the Commercial Market Outlook, which is a 20-year forecast covering every region of the world. Boeing's most recent outlook report predicts that air traffic to and from Africa is expected to grow by about 6.1% annually over the next 20 years, resulting in the need for 1,150 new airplanes. As in all markets, the majority of the demand will be for single-aisle airplanes to meet the increased demands of intra-Africa travel and more connectivity between African cities.  But the need for new wide-body airplanes will also increase as air travel continues to grow among the expanding African middle class and long-distance visitors.

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