Ethiopia has announced plans to build Africa’s biggest and most prestigious airport in a US$5 billion plan that sets it on course to economically lock horns with Rwanda and Kenya over dominance of regional aviation business.
The mooted plan is also meant to seal prospects of East African aviation hub, emerging as the continent’s most dominant aviation space, grabbing the meat away from South African market.
Ethiopia’s plans come immediately after Qatar Airways announced that it was in the final stretches of concluding a deal meant to enable it takeover Rwanda’s flag carrier RwandAir.
Once done, the Qatar Airways-RwandAir deal is meant to heighten the intensity of the battle of East African skies by elevating RwandAir against Kenya Airways and Ethiopian Airlines.
Ethiopia’s new airport at Bishoftu, South of Addis Ababa, analysts say, will become Africa’s most prestigious asset, larger than UK’s Heathrow or France’s Charles de Gaulle.
The plans by Ethiopia reveals Africa’s ambitions to actualize its huge economic potential as the African open skies initiative takes shape.
The new plan by Ethiopia is thus meant to stock healthy competition in the Eastern African region, through national flag carriers.
The development is also refreshing because it provides proof that there is more to regional integration in terms of healthy competition than squabbles.
Rwanda in the last 15 years looked up to Ethiopia to support it to develop its nascent aviation sector.
Ethiopia accepted in the spirit of regional economic cooperation.
As the year 2020 unfolds, Rwanda is now poised to stand up as a significant player in the regional aviation business, overtaking Uganda and Tanzania to favorably compete against main players Kenya and Ethiopia.
East Africa recently bore the brunt of squabbles between Rwanda and Uganda in a spat that has potential to erode recent gains made in regional integration.
CAPA, a global news agency that covers global aviation and travel industry, says that Ethiopia is now on course to design something that, once on execution stage, will set new dynamics in Pan-African aviation business.
The project is set to be the biggest commitment made by any airline to operate an airport.
“While it is the case that airlines do sometimes build and operate new airport terminals and very occasionally airports, the suggestion coming out of Addis Ababa the capital of Ethiopia, transcends anything that has gone before it”, CAPA says.
The plans without a doubt cements Ethiopian airlines’ dominance of African airspace, using its twin strategy of capacity and consolidation within African aviation industry.
“It looks as if Ethiopian Airlines’ CEO Tewolde Gebre Mariam has committed the airline to building a new US$5 billion airport at Bishoftu, 40 Kilometres south of Addis Ababa to make the city the continent’s leading hub”, CAPA says adding that, “The 35 Square Kilometre airport would have design capacity of 100 million passengers per year, which would put it among the five largest airports in the world as things stand and Mr Gebre Mariam has claimed that it will be Ethiopian Airlines growth that will fill that airport in a new year’s time.”
Currently, the current airport at Bole Ethiopian Airlines operating hub has a capacity of less than 20 million passengers per year; still the largest in the region.
This serves Ethiopian Airlines pretty well with 93.4% seat capacity and 98% or aircraft movement.
One major single important implication is that the building of the new airport will no doubt place Ethiopia as Africa’s number one destination for both business and leisure.
The new airport will also place Ethiopia as Africa’s primary destination in the continent in the way that the big middle eastern airlines capitalize on their hub cities.
It is instrumental in this unfolding dynamics within the battle for Eastern African skies that Qatar Airways has already made its presence in this market by its planned takeover of a 49% stake in RwandAir, along with commitment to sink in US$1.3 billion to assist Rwanda to build a modern international airport at Bugesera, 25 minutes drive away from Kigali city center.
Shaping up Africa’s most modern aviation hub in East Africa
The dominance in East Africa by Ethiopian Airlines is very clear.
Its two other competitors, Kenya Airway,s its long standing competitor and RwandAir, now heavily muscled by Qatar Airways, are now poised to stiffen competition in the region.
However, in a strategic upstaging of stakes, Ethiopian Airlines is now moving to do the unthinkable, in a bid to stay ahead of its two competitors, which is to build an African airline operating one of the largest airports anywhere in the whole worl, according to CAPA.
Taarifa, in its last analysis on regional aviation business, provided key insights into this emerging scenario.
East Africa, Tarrifa noted, is using the three hubs of Kigali, Nairobi and Addis Ababa, to set up continent’s most ultra modern aviation hub.
The Kigali hub currently handles 700,000 passengers per year, against Nairobi’s 7 million passengers per year, and Addis Ababa’s 12 million passengers per year.However, in a bid to upstage its regional competitors, Rwanda, through its deal with Qatar, is seeking to up its game by constructing a new airport at Bugesera with capacity to handle 14 million passengers per year by the year 2032.
The healthy competition between the 3 national flag carriers has a number of positive implications.
Air travel in East Africa will become more cost effective. More people are expected to use airlines to travel within the continent.
There are chances of significantly boosting the competitiveness of East African community as the continent’s power house as the free area takes shape.