ADDIS ABABA, November 21 – African airline chiefs meeting in Addis Ababa Ethiopia have expressed concern over the escalating financial crisis in the western world saying it was creating a fertile ground for the domination of the continent’s airspace.
The African Airlines Association (AFRAA) Secretary-General Christian Folly-Kossi said Africa\’s indifference to the global financial crisis was likely to work against the continent, whose national carriers would lose the competition for passengers.
"We need to take advantage of the financial crisis by reviewing our fundamentals. The indifference to the crisis is not helpful," the AFRAA chief cautioned adding that many African countries were under-estimating the effect the financial crisis would have on them.
African aviation experts and the financial institutions involved in the financing of the aviation business are meeting in the Ethiopian capital to discuss innovative ways of funding aircraft acquisitions and growth.
The meeting, coming against a backdrop of a looming global economic recession and heightened concern over the global financial meltdown, has heightened fears that African airlines would suffer most from the global credit crunch and the airline traffic slowdown.
Ethiopian Airlines Chief Executive Girma Wake predicted that the effects of the financial crisis in the US and Europe would be felt in a more severe form within the continent by early 2009.
European travellers are cutting down on holiday expenses and leisure travel, reducing the possibility of African airlines-that are dependent on the European traffic of holidaymakers -posting good financial returns.
"The problem will be felt in early next year. Hopefully, the recession may not last for a year," Wake told journalists on the sidelines of the annual aviation Finance meeting.
He however expressed confidence that Africa\’s economic fortunes would improve while its airspace was likely to be the next growth frontier given the continent\’s lack of alternatives to air travel.
"We believe the African transport field is much bigger," he said adding that the financial crisis might also prove positive for African airlines seeking external finance as the financiers would put stricter lending conditions.
Global aviation financiers attending the meeting have hinted at the possibility of putting US$50 billion at the disposal of African airlines for fleet modernization and system facelifts.
The aviation officials have however; expressed concern that the European and American authorities are using the financial crisis as an excuse to boost funding for their ailing airlines which would use the cash injections for regional expansion into Africa.