Central Africa offers growth potential for airline industry, but challenges remain
How we made it in Africa speaks to Daniel Serrano, general manager for Equatorial Guinea at German airline Lufthansa, about opportunities in the aviation industry.
Where do you think the untapped opportunities are in West and Central Africa’s aviation industry?
There are definitely a lot of opportunities. The region’s aviation industry is still underdeveloped. We’ve yet to find an airline that can truly say that it has connected the whole continent. It’s still easier to fly to many African countries from countries outside of Africa than it is to fly between African countries. This is true of Equatorial Guinea too. If I want to fly to South Africa from here, I have to go via a third country, which is time consuming. So there are a lot of opportunities when it comes to expanding the industry.
But why are companies not successfully taking advantage of these opportunities?
There are many factors. Firstly, it’s not easy to start an airline – the barriers to entry are quite high. Secondly, the political situation differs extensively from country to country, and stability for the airline industry, especially for “start-ups”, is an integral part in sustainable operations.
How has the drop in the oil price affected your operations?
Equatorial Guinea’s GDP relies heavily on oil, so the drop in the oil price has had a direct impact on the travel regiment of corporate customers for all carriers serving the nation. Many people fly less often and choose less-expensive classes, or they stop flying altogether. The downsizing of operations in oil fields also affects all of the international airlines based in Malabo. That said we are very pleased with our service to and from Malabo, serving our loyal customers with our new retrofitted cabins and offering the latest in on-board comfort across all classes.
Equatorial Guinea does, however, have a number of initiatives aimed at diversifying the economy. Does this make you optimistic about the future?
Yes, I am optimistic. The country is on the right track by trying to diversify, and they need to. Oil is a limited resource and you can’t put all of your eggs in the same basket. But I have heard of a lot of projects that are going to help the economy become less dependent on oil. We are watching these developments carefully.
The Lufthansa Group has long-term plans here in Equatorial Guinea. So far we don’t see any big risks. We see a lot of potential in the people and the country. It’s moving forward. So we see potential for business and a suitable option for flights. We want to be able to link Equatorial Guinea with the world.
There is also talk of developing the country’s tourism industry and making it easier to get visas. What impact would this have on Lufthansa’s operations?
It would have a huge impact on us. From what I’ve seen during my time here is that Equatorial Guinea has the potential for tourism. While they don’t yet have a tourist culture – people aren’t familiar with tourism, and don’t know how to approach tourists, how to appeal to them – this can be learned. If visas become easier to apply for or if fewer nationalities need them, that will also help. Incoming tourism would boost the local economy and create more demand for air travel to Malabo. We of course would benefit as Lufthansa is one of the largest network carriers in the world.
Equatorial Guinea has ambitions to establish the capital Malabo as an air travel transit hub for the region, with a new airport terminal already under construction. Your thoughts on this?
Well Malabo is placed in a very strategic point in Africa. If you look at the map, the radius from here is quite big, so in theory you could basically go to any airport in Africa from here. So it is a very good connecting point, geographically speaking. The challenges lie in the policies and regulations. That is a different step of the discussion: what is the approach? How is this going to work, taking into account the need for teaming up with other carriers in the continent? You definitely can’t do it by yourself.
The new terminal is very important, because right now in Malabo we don’t have an appropriate terminal with transit facilities for international passengers, whether from domestic or international destinations. Although Equatorial Guinea is a safe country, aviation security is still important. We’re hopeful that the new terminal will mean that passengers won’t need visas just to transit through the country. This can be achieved with more advanced technology and will take away any doubt flying through Equatorial Guinea is safe, secure and efficient.