Africa’s aviation fleet is expected to increase by 25% by 2034, driven by ambitious airline expansion plans from the likes of South African Airways (SAA), which aims to triple its fleet over the next decade.
Since its revival in September 2021, with only six aircraft and four routes, SAA’s fleet has since expanded to 14 planes servicing 15 routes. Plans are to have 20 planes in service by the first quarter of 2025 and 40 by 2035.
With the aviation industry further bolstered by large-scale expansions from Ethiopian Airlines, Kenya Airways, RwandAir and various private airlines, Africa’s total fleet is expected to reach over 1 400 aircraft by 2034, in line with an expansion in demand.
“The growth in Africa reflects an expected expansion of demand. Figures from IATA show that African passenger numbers will nearly double by 2035. This will require airlines to continue to invest in expanding their fleet, as well as looking at new routes to add to their network,” said Paul Calvey, Oliver Wyman Partner and Head of its Operations in South Africa.
Oliver Wyman’s latest Global Fleet and Maintenance, Repair and Operations (MRO) Market Forecast predicts that the number of commercial aircraft worldwide will reach more than 36 400 by the start of 2034, a 28% increase over the current fleet of around 28 400. The forecast also indicates that global MRO spending is expected to reach US$104 billion, surpassing the pre-pandemic peak reached in 2020.
Investment challenges
The forecast identifies several challenges that hinder investment in the aviation sector. These include the impact of Covid-19, inflation, and shortages of skilled labour, raw materials, and aviation maintenance technicians (AMTs) and engineers. The industry must modernise and optimise production along the supply chain, while the MRO support network faces similar challenges in keeping aircraft operational.
“While the industry must invest in overcoming those challenges, it’s important to remember that it’s not easy for it to do so at present, according to a number of trends,” said André Martins, Partner and Head of Transportation, Services and Operations for India, Middle East, and Africa at Oliver Wyman.
He said that rapidly rising interest rates have made borrowing far more expensive than it was pre-pandemic.
“Mounting inflation, meanwhile, has created significant wage pressure across the industry. In the US, for instance, captains’ salaries at mainline airlines increased by 46% between 2020 and 2023, while those flying for US regional airlines saw their wages rise by 86%. Furthermore, this inflationary environment has led to higher costs for aircraft components and other supplies compared to before the pandemic,” said Martins.
Other cost factors, such as escalating conflicts in the Middle East and attacks on ships in the Red Sea, have led to increased aviation fuel prices. Although prices are lower than in 2022, industry players remain cautious about potential further increases.
Gearing up for global growth
Despite the current challenges, there are indications that conditions may improve, facilitating investment in the aviation sector. While global economic growth is currently at its lowest level since the 1990s, the outlook is becoming more positive. Inflation is expected to ease, and the US economy is projected to experience a soft landing. Although major economies like China still face economic headwinds, the global economy is likely to avoid recession.
This positive outlook will eventually enable central banks to reduce interest rates, making borrowing cheaper and enabling crucial investments in the aviation sector.
“Investment is necessary not only to address labour and supply chain optimisation challenges but also to meet the increasing pressure for environmental sustainability. This includes investing in sustainable aviation fuel, which can significantly reduce emissions,” Martins said.
