Boeing has predicted that the African air transport industry will require over 1,025 aircraft in the next 20 years. According to Boeing, 90% of these new orders will be required for expansion due to market growth. Equally, Boeing projects the manpower requirement for Africa for the period at 69,000 pilots, mechanics and other professionals. In this exclusive interview with Aviation & Allied Business Journal, Mr. Randal (Randy) L. Heisey, Managing Director, Commercial Marketing – Africa and Middle East, The Boeing Company discusses a wide range of issues in the African Aviation industry.
Q: The Covid-19 pandemic had a major effect on every sector globally including the aviation industry. How has the Boeing company fared in Africa since COVID-19 pandemic, how has the company fared generally?
A: The Boeing Company, as well as our airlines, have been faring well because the transportation industry was among the first to recover from the pandemic, as people recognized that they had missed out on the opportunity to connect with one another in person during the pandemic. As a result of that, there’s been a resurgence in demand for air travel that has led to new demand for Boeing support to our airline customers to help enable their success. The ways that we have in the very recent past supported our customers is by helping them return their fleets to service those airplanes that were parked during the pandemic. Several of them put into long-term storage needed some restoration and repairs. In addition to that, we are helping airlines operate new services with new airplanes that they have just recently taken delivery of.
For example, over in the East Coast of Africa, we have had some recent new airplane-type deliveries to airlines like Air Tanzania, who has just taken delivery this year of a new 767 freighter airplane to carry air freight, which has been a key part of the industry. Then other airlines like nearby in Côte d’Ivoire and in Togo, a couple of airlines have just started operating the 737 MAX.
We are seeing airlines choose Boeing products, and we are delighted to be their partner as they continue to grow out of the pandemic.
Q: That’s awesome. It is quite obvious that Africa is a major marketplace for Boeing. What exactly interests Boeing in the African marketplace?
A: Boeing is interested in Africa, in part, because Africa is among the regions that will be the fastest growing over the next 20 years. The great potential of Africa aviation has yet to be realized. Some, as we talked about yesterday, this continent has one of the largest populations, one of the fastest growing economies, but yet is only a small part of the commercial aviation industry. So the opportunity here for Africans to be more effective in leveraging the growth is huge. And Boeing is very focused on helping to support that. And as I talked about yesterday, we see over 1,000 new airplanes in the next 20 years coming into this market.
Q: Globally, there’s been a shortage of skilled manpower in the market, what is the situation in Africa from Boeing’s perspective and what are the measures Boeing takes to solve this?
A: Africa is in a similar position to the rest of the world. Africa is not particularly disadvantaged and not necessarily advantage, other than the fact that there is this young workforce that is ready to be trained and available to enable the growth in the industry. The fact that there is a bright, young talent available here provides great opportunity for the African Aviation industry.
We have a number of ways that we support training, and some of that involves our community outreach. During the Aviation Africa conference, we highlighted a few of the ways that we have been engaged for decades across Africa. One of the organizations that we partner with is Junior Achievement, which works with young people to help them gain more skills to contribute to the global and local society. Beyond that, we have the desire and ability to participate with others in the industry to provide basic training. There are African universities that focus on aviation, both here in West Africa as well as over in East Africa, and we support those programs with a number of our initiatives.
Q: How has the supply chain issues affected Boeing in Africa in particular?
A: The supply chain challenges have meant that our operators, our partners operating Boeing airplanes have been challenged because they can’t get the parts as readily as they had been able to do the routine maintenance that’s required on their airplane. So, it’s been a mutual challenge. As we work to support them, at times we divert spare parts or parts that are being planned for production of new airplanes to our customers. That has some impact on our customers and their operations, the airlines in Africa. But also, the shortages mean that we can’t increase our production or manufacturing as rapidly as we would like. There’s this increasing demand for our new airplanes, but we can’t build them as fast as we would like to meet the demand because of the supply chain challenges.
Q: In your recent presentation, you alluded to the shortfall in Africa’s future orders. What could be responsible for this?
A: There is a challenge globally, and it’s not uncommon, particularly coming out of a big shock to the economic system, for airlines or businesses to be more short term in their planning processes. And because of the supply chain issues that we just talked about, currently, we are producing airplanes at a rate that is effectively sold out for the next few years. Airlines in general, have not yet planned for their future needs to the point that only about half of the airplanes needed for the next 10 years globally have already been planned in a strategic plan for a business airline. In Africa, it’s only about 25% of those airplanes that are going to be needed in the next 10 years have been selected. Therefore, more long-term planning should be executed by African Airlines to ensure that they can get access to new airplanes at the time that they’re needed. Okay.
Q: In the area of financing, how do you assess the performance of Cape Town Convention in Africa?
A: The Cape Town Convention is applicable globally, and it was implemented as a result of a recognition by the financial community that there needs to be a common standard to assure that in the unlikely event that someone who borrows money to procure an airplane in the event that they fail to perform on their financial obligations to pay that debt, that the financier who puts their investment into the asset can reclaim that asset.
The Cape Town Convention is very important for access to financing, because it’s perceived as additional risk if that’s not in place. The assurance that if there’s a default in the loan, that the financer can recover that asset, that high-value item. Even for those who choose to finance without that assurance of the Cape Town protocol, they will charge a risk premium. It could be that if it’s not in place in some countries in Africa, if they’re able to get financing, the financing will be more expensive than if that were in place.
These countries that have not yet ratified it and completed the Cape Town Convention, they will either have very difficult time getting access to financing or they will pay a higher premium for that financing.
Q: About carbon emission reduction, it’s a major issue in the aviation industry globally. What is Boeing doing as regards this?
A: Boeing has approached this challenge with our knowledge and insight about airplanes and how they’re operated. And we see four primary pillars to support this global sustainability of our environment. One of them is about the fuel that we use. There are new fuel sources that are available. They include sustainable aviation fuel, and then there are alternative sources of fuel that could be brought into the future with more technological advancements such as hydrogen or electric power.
They have a good fit in certain segments of the market. Then there are operational practices that airlines can use without changing anything else that could be employed to bring savings as well on the order of anywhere from 2% to 20% improvements just by operating more efficiently with how they fly their airplanes and using more digital tools in the operation of the current fleets. Of course, renewing fleets to newer generation airplanes naturally brings anywhere from 20% to 40% reduction in emissions and reduction in fuel use. Then finally, there is the capability or potential for all new technologies to come into the industry, and we continue to invest in developing new technologies that will reduce the impact on the environment.
Q: Deriving from that, how is Boeing managing the end of life cycle of its aircraft in Africa?
A: We approach Africa like we have been approaching the rest of the world for nearly the past 20 years. Boeing, back in 2006, participated in supporting an organization called the Aircraft Fleet Recycling Association (AFRA), the association goes through a certification process to qualify aircraft recycling entities that ensure that airplanes that have reached their end of useful life are used in an environmentally responsible way. The materials that can be recycled and reused by other airlines are extracted from the airplanes, and then the actual airplane structure itself can be recycled in many, many cases.
Q: What are the other challenges Boeing is experiencing in the African market that you would like to share?
A: Boeing is delighted to be a partner and a long-term partner in the African aviation industry. That is reflected by the fact that today approximately 70% of all the commercial airplanes in Africa are Boeing airplanes. We understand this marketplace and the great potential for future here. We continue to maintain very close relationships and increase our presence with airlines and with the communities across Africa as we work to develop the society around the aviation industry. We partner in many, many countries, as I said, through programs for youth and their education and the enhancement of the environment.