AVIATION INDUSTRY: CALLY AIR, A BULLISH TRANSITION FROM BUST TO BOOM

Aviation is one of the most “global” industries: connecting people, cultures and businesses across continents. Colleagues throughout the sector are committed to raising awareness of the benefits and the role of aviation. It is necessary for all stakeholders and partners to work together to maximize the benefits of air transport, and to support the sustainable growth of aviation by connecting more people and more places, more often.

Aviation has continued to expand. It has weathered crises and demonstrated long-term resilience, becoming an indispensable means of transport. Historically, air transport has doubled in size every 15 years and has grown faster than most other industries. In 2016, airlines worldwide carried around 3.8 billion passengers annually with 7.1 trillion revenue passenger kilometres (RPKs). Fifty three million tonnes of freight were transported by air, reaching 205 billion freight tonne kilometres (FTKs). Every day, around 100,000 flights transport over 10 million passengers and around USD18 billion worth of goods.

Aviation provides the only rapid worldwide transportation network, which makes it essential for global business. It generates economic growth, creates jobs, and facilitates international trade and tourism. According to recent estimates by the cross-industry Air Transport Action Group (ATAG), the total economic impact (direct, indirect, induced and tourism-connected) of the global aviation industry reached USD2.7 trillion, some 3.5 percent of world’s gross domestic product (GDP) in 2014.

The air transport industry also supported a total of 62.7 million jobs globally. It provided 9.9 million direct jobs. Airlines, air navigation service providers and airports directly employed over three million people. The civil aerospace sector (the manufacture of aircraft, systems and engines) employed 1.1 million people. A further 5.5 million worked in other on-airport positions. 52.8 million indirect, induced and tourism-related jobs were supported by aviation.

These estimates do not include other economic benefits of aviation, such as the jobs or economic activity that occur when companies or industries exist because air travel makes them possible, the intrinsic value that the speed and connectivity of air travel provides, or domestic tourism and trade. Including these would increase the employment and global economic impact numbers several-fold.

One of the industries that relies most heavily on aviation is tourism. By facilitating tourism, air transport helps generate economic growth and alleviate poverty. Currently, approximately 1.2 billion tourists are crossing borders every year, over half of whom travelled to their destinations by air. In 2014, aviation supported over 36 million jobs within the tourism sector, contributing roughly USD892 billion a year to global GDP.

Air transport is a driver of global trade and e-commerce, allowing globalization of production. The small volumes of air cargo amount to big values in world trade. In 2014, USD6.4 trillion worth of goods were transported internationally by air, representing 35 percent of world trade by value, despite representing only 0.5 percent by volume. Aviation’s advantage over other modes of transport in terms of speed and reliability has contributed to the market for “same-day” and “next-day” delivery services and transportation of urgent or time-sensitive goods.

Some 87 percent of business-to-consumer (B2C) e-commerce parcels are currently carried by air. The e-commerce share of scheduled international mail tonne kilometres (MTKs) grew from 16 percent to 83 percent between 2010 and 2016 and is estimated to grow to 91 percent by 2025. (By Uniting Aviation on February 28, 2018)

In Nigeria, commercial aviation industry has contributed about $0.7 billion (N137.9 billion) to the Nigerian Gross Domestic Product (GDP), and projected investment of $12 billion in the short and medium term that would lead to passengers’ growth, between 12 and 25 million by 2018.

Additionally, the industry data revealed that Nigeria’s passenger traffic for inbound and outbound destinations soared to 21 million in 2014, surpassing the 2013 record by over 20 per cent.

According to the Head, Aviation Finance for Africa at Investec, Melanie Humphries, “There has been tremendous economic growth in Nigeria and with the increase in wealth and the expansion of trade and business opportunities, the demand for business travel has also expanded”.

He added: “The primary reason is that business aircraft are a necessary tool for many high net worth individuals and corporates that do business in and around Africa. Poor regional connectivity and limited infrastructure means that air travel is still the preferred mode of transport for passengers and cargo – presenting an opportunity for the aviation industry in Nigeria and Africa as a whole.

“In fact, business jets in Africa, and the access, predictability and passenger safety they provide, are playing a critical role in realising the continent’s growth potential.”

Furthermore, he stated that the African business aviation market has been resilient through the global financial crisis and new aircraft sales fared better than developed markets such as Europe and North America.

He said: “Demand for business aircraft is highly correlated to wealth creation, which of course is dependent on economic growth. The African fleet has more than doubled since 2000 and now comprises around 2.4 per cent of the world corporate jet population and as business jets are increasingly being seen as an productive business tool, the long-term prospects for business aviation remain strong”.

According to the statistics, Africa’s business jet fleet has more than doubled in the last 10 years, noting that Africa’s two largest business aircraft registries, South Africa and Nigeria, account for over 50 per cent of the entire fleet of business aircraft in all of Africa.

Also, it projected that between 2014 and 2033, 685 business jet deliveries are expected in this region, with a fleet compound annual growth rate (CAGR) of 5 per cent over the forecast period.

It disclosed that commercial air transport supports 6.9 million jobs and $80.5 billion in GDP in Africa, while it forecasted that the number of jobs supported by aviation and tourism would grow to 10.5 million by 2032, a 51 per cent increase. Moreover, the contribution to GDP is forecast to grow to $168.7 billion by 2032, a 109 per cent increase on 2012 figures.

THE CALLY AIR
The state’s venture into aviation industry is one of the best decisions, so far owing, to the fact that Cross River State is fast becoming a global tourism hot-spot, the influx of tourists to the state would come with huge patronage for air travels and there is going to be very high preference for the state owned airline. This would be a revenue spinner for the state.
Cally Air, the start up airline owned by Cross River State, in South South Nigeria recently received two Boeing 737 aircrafts in Lagos Nigeria to start its operation. The airline which, is a project of Governor Ayade Ben, is expected to start with local flights and grow into regional and international flights within a few years of operation. By this, the tourism potentials of the state, which is already a destination of repute in the West African region, is expected to receive a boost with influx of tourists and travellers. Also expected to take a leap, are the state’s industrialization and trade which will go hand in hand.

The current venture of Cross River State Government into the Aviation Industry signals her proper initiation into commity of wealthy entities and a bullish transition from bust to boom that would end the era of backward economy and obtrusive laid-back of civil service dependent economy.

This is a summary. The detail is in the Book.

© Eval Asikong is SSA Research and Strategic Planning.

Leave a Reply

Your email address will not be published. Required fields are marked *

*