Africa represents a great investment opportunity for ambitious multinationals, with long-term annual growth projections of about 4.4% a year and a population of 1 billion with ever increasing purchasing power. A key to reaching its enormous potential is to improve connections to, from and within Africa. The boom in the exploitation of oil and gas resources is already driving an increase in air traffic. Currently, however, Africa accounts for just 3% of global air traffic and African airlines for 20% of intercontinental connections. The sector has been held back by high industry costs (namely high fuel costs), inadequate infrastructure at several airports and weak tourism figures, at only 5% of global tourism visits in 2012, according to the African Airlines Association (AFRAA) 2013 General Assembly.
Responding to the globalization of the aerospace industry, which has opened up new markets and new opportunities, Bombardier Bombardier Aerospace gained a foothold in Africa when it began operations in a transition facility near Casablanca one year ago. The eventual permanent facility, currently in construction and due to open in late 2014, represents a $200 million investment that will create 850 jobs by 2020. With this investment, Bombardier believes it can develop a manufacturing capacity that will improve its cost competitiveness and is confident it can provide solutions to respond to African airlines’ profitability issues with its range of commercial aircraft suited to the African market.
Forecasts show Africa will operate 1,100 new airplanes and will have to replace a good portion of its aging fleet over the next 20 years. Of these, 70% will be single-aisle aircraft. Tourism is set to increase, especially with Europe coming out of its economic crisis, and air traffic is projected to grow at an annual rate of 6.1%. Bombardier believes its investment in Morocco, a location chosen for its internationally competitive manufacturing costs, low shipping and transportation costs and proximity to Europe, will serve as a springboard to the rest of the region and help it win an important part of the continent’s demand for new aircraft.
“Africa is the continent of the future in many aspects, including aviation. Our commercial aircraft such as the CSeries, the Q-Series or the CRJ Series – for which we are already producing operational parts in Morocco – are the future of aviation. It is a logical move for us to market our aircraft in Africa where we expect they will significantly contribute to the growth of the sector,” says Ray Jones, Senior Vice President of Sales, Marketing and Asset Management, Bombardier Commercial Aircraft during a recent interview at Bombardier’s offices in Casablanca. “Increased profitability should encourage African airlines to provide more routes, better service and better prices.” Bombardier has already booked 201 firm orders for CSeries airliners, and commitments from 18 customers and lessees, underlining the aircraft’s position as a major part of the future of global aviation. The CSeries took its maiden flight in September 2013 and more than 10 aircraft are already in various stages of testing and production.
“Our investment in Morocco shows our dedication to the continent’s economic development which is so intricately linked to regional aviation. We are confident the CSeries can boost the African sector’s ability to meet demands for traffic growth, reduced emissions, improved safety and added comfort,” concludes Mr Jones. Bombardier brings know-how and expertise to the region and is currently in talks to develop its local supply chain. By training local talents and bringing them into their operations and involving local suppliers, it can be a catalyst for an industry that is so closely tied to the continent’s growth.
Source: Forbes
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