Interview: João Miguel Santos, Managing director, Boeing International Sub-Sahara Africa
To improve the freedom of movement of people, 23 African countries signed a treaty to form a continental single market for air transportation in January of this year, joined by three more by the end of May. As the top player in the aircraft market, US firm Boeing is in prime position to benefit from the boost in competition and passenger numbers.
TAR: What is Boeing’s expansion strategy? What markets are you excited about?
João Miguel Santos: Five years ago, our 20-year forecast [for Africa] was 120 aircraft. Our forecast has now almost doubled. What we foresee as the demand for Africa by the year 2057 is 1,220 aircraft. Today, we have 62% market share in the continent. My goal is to get 65% market share. Why should we settle for less?
“We firmly believe in open skies. It creates competition. More airlines can sprout”
Was the delay in delivering the 787 damaging to your relationship with Ethiopian and other carriers in the continent?
A delay in delivering an airplane is always damaging. It had never happened in Boeing’s history. But about 168 new markets never previously connected have now been created because of the 787 model. Look at Ethiopian Airlines: they are flying from Dublin to Los Angeles! The 787’s costs of operation are so low and the plane is so efficient, it is doing what it was designed to do.
In Asia, low-cost carriers have been having problems. Do you see that as the future for Africa?
[Comair chief executive] Erik Venter said that one of [the airline’s] secrets of success is the constant drive to replace the fleet with new aircraft. You cannot start cheap: AirAsia has been successful, but they buy new airplanes. The 737 MAX that Comair is using burns 14% less fuel than the 737-800. That makes operating costs go down by 5%. And when the margins in the aviation industry are so small, 5% is a big number.
Which governments are doing the right things now to develop their air transport industries?
The single African air transport market and the continental free trade agreement were signed recently. They are the number-one initiatives as part of the African Union Agenda 2063. We want to see tariff-free trade just like we see in Europe today.
We firmly believe in open skies at Boeing. It creates competition. More airlines can sprout. If they compete, prices go down. If the fare prices go down, more people can travel. Africa is the last continent to implement open skies. A lot of places today are not served or are underserved. The challenge in Africa is that we have poor road or railroad infrastructure.
Does that not present opportunities for the aviation industry?
Aviation is the most important component of trying to develop free movement of people, goods and trade in Africa. The only airline in Africa that has freighters in its fleet is Ethiopian Airlines. Most of the goods exported out of or brought to South Africa are not travelling by South African freighters. How sad is that?
Let’s talk about efforts to reduce emissions. There is an investment drive in biofuels in Africa.
When you have an airplane that burns 14% less fuel, that’s a massive contribution to the environment. However, that’s not good enough. We now have focused on four strategic sources of biofuels. One of them is [the tobacco plant] solaris. The coating of its seeds can be refined into jet fuel, while the inside can become food for cattle.
Could it be used for the entire aviation industry?
It has to be scaled up massively. Right now, the objective is that four years from now South African Airways flies on 50% biofuels. And solaris is 4% more efficient than fossil fuel, which means you actually could reduce fuel consumption by another 4%.
This interview first appeared in the July/August 2018 print edition of The Africa Report magazine