18 September 2018

Africa: Who's the Biggest African Airline of Them All?

Photo: Premium Times
The wing of an airplane used to illustrate story

We stack up the continent’s airlines by fleet size, number of employees, revenue, passengers carried and whether they’re making money.

Zambia’s former transport minister recently warned against reviving the national airline 24 years after it was grounded, saying it’s “a well-known fact that all airlines in Africa… are struggling”.

Yet the relaunch of Zambia Airways has been made possible by a US$30 million cash injection by Ethiopian Airlines, said to be the largest and most profitable airline on the continent. The airline’s willingness to finance Zambia Airways suggests that some African airlines are profitable and, it seems, aggressively expanding.

So who are the biggest players in the African airline game, and are any of them making money?

Planes? Personnel? How to measure airline size

There are various ways to stack up airlines by size, transport economist Dr Joachim Vermooten, a senior researcher at the University of Johannesburg’s transport and supply chain management department , told Africa Check. He said that while revenue, assets, profit, and market capitalisation may interest financial analysts, the aviation industry rarely uses these to measure an airline’s size.

Some of the most frequently used measurements, according to Vermooten, are the number of aircraft, available seat kilometres, number of destinations, number of employees and passengers carried.

Some of these factors will overlap. An airline with a large fleet of aircraft that fly to numerous destinations will also employ a large number of people and carry many passengers.

The size of an airline also depends on whether we are looking at the airline group, or just the airline itself. For example, the South African Airways Group consists of SAA airline, SAA Cargo, SAA Voyager, SAA Technical, South African Travel Centre, Mango, and Air Chefs.

While SAA airline is by far the largest company in the group, contributing 81.84% to its 2017 revenue , the other parts of the business are still significant.

So who is the biggest?

The International Air Transport Association told Africa Check that Ethiopian Airlines was the largest airline on the continent when measured by revenue passenger kilometres, followed by South African Airways and EgyptAir . This was based on the latest World Air Transport Statistics , an annual compilation of key aviation statistics.

Revenue passenger kilometres (RPK) is a measure of passengers carried by an airline. It is calculated by multiplying the number of paying passengers by the distance travelled.

By this measure, Ethiopian Airlines soars ahead: its 34.9 billion RPKs in 2017 is far beyond SAA’s 19.8 billion and EgyptAir’s 18.3 billion.

In fact, by most measures Ethiopian Airlines is the largest airline on the continent. It has a larger fleet, hires more staff and is the only large African airline to generate a significant profit, ETB6.1 billion in 2015/16 (at the time about US$278 million).

The other large African airlines to make some profit are EgyptAir and Royal Air Maroc, according to the latest financial results made public. The EgyptAir group reported a profit of EGP71 million in 2016/17 (then about $4 million), though the airline itself suffered losses of EGP5.6 billion (about US$315 million).

Royal Air Maroc also showed profits in their latest results , suggesting earnings of MAD231 million in 2015/16 (about US$24 million at the time).

Airline RPK* (airline) Fleet size (group) Personnel (group) Revenue (group) billions Profit (group) billions

Ethiopian Airways 34,927 108 13,484 ETB54 / US$2.5 ETB6.1 / US$0.28

South African Airways 19,837 64 10,071 R30.7 / US$2.5 -R5.4 / -US$0.44

EgyptAir 18,269 50 9,000 EGP4.7 / US$0.26 EGP0.07 / US$0.004

Royal Air Maroc 16,565 54 3,091 MAD14.4 /US$1.5 MAD0.23 / US$0.02

Kenya Airways 9,197 39 3,582 Ksh116/US$1.1 -Ksh26 / -US$0.26)

* millions of kilometres travelled by paying passengers (revenue passenger kilometres)

Latest figures available: SAA 2017, EGY 2017, ETH 2016, KEN 2017, RAM 2016

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