United Arab Emirates (UAE) carrier Emirates Airline is placing a strategic focus on Africa in the coming decade and will grow its operations by over 40 per cent. The revelation by the carrier’s Sir Tim Clark, at the recent Africa Global Business Forum 2014, follows the surprise announcement that the carrier, which has general shied away from equity investments, had agreed a Management Concession Agreement to take a role in the management of TAAG Linhas Aéreas De Angola.
Speaking at the conference around the theme of 'Connectivity and Trade - Supporting Dubai as the Hub to Africa', Sir Tim Clark, President of Emirates Airline said: "Africa has been a great growth story for us. The Government of Dubai recognised the untapped potential of Africa early on and Emirates has been instrumental in supporting the region’s growth.”
Today, Emirates fleet investment in Africa tops $7 billion with operating costs of over $2 billion and it currently operates to 22 passenger and six dedicated freighter destinations in Africa. “We will add around 10 destinations in the next decade and will continue our investment and commitment to introduce more frequencies to our existing points to provide critical links to emerging markets from Asia, the Middle East and Australia," said Clark. This could see Emirates provide an additional 8.5 million seats to its African capacity.
Dubai’s geographical location makes it possible for African travellers to experience shorter travel times, which have been historically routed through European hubs like London, Paris and Frankfurt. There are over 500,000 African nationals that currently reside in Dubai. Over 800,000 African Nationals visited Dubai last year alone and it is estimated that by 2020 tourism from Africa to Dubai will reach over 1.5 million visitors per year.
"Africa is still an underserved market and Emirates will continue to channel traffic through the Dubai hub, which has already become a key gateway for the African continent," added Clark. In the past five years, Emirates carried over 1.6 million passengers and 40,000 tons of cargo between Africa and China, underscoring the vital trade relationship that the continent has with the east.
The agreement with the Republic of Angola, in its capacity as the majority shareholder of TAAG Linhas Aéreas De Angola, to take a role in the management of TAAG is a key part of this African strategy. The ten-year Management Concession Agreement lays the foundation for both airlines to jointly leverage commercial opportunities in Africa and beyond.
This initiative is to further the Republic of Angola’s vision to create a world class Angolan carrier with the support of Emirates. Although agreed in principle, the agreement will only take effect after a number of conditions have been satisfied, including the receipt of various Government and regulatory approvals.
As part of the agreement, Emirates will work closely with the Angolan government and TAAG Linhas Aéreas De Angola to formulate and implement a business plan, provide management support and devise fleet and route network strategies, whilst bringing synergy through the complementary networks.
Both airlines will also cooperate across a wide range of areas including bilateral code-sharing on cargo and passenger services, participation of customers in both airlines’ frequent flyer programmes and passenger and cargo handling. Emirates has also committed to allocate its resources to staff and crew training on best-in-class business and operational processes and systems. Emirates will not contribute equity under this agreement but appoint four senior managers to work for TAAG Linhas Aéreas De Angola.
“Through this partnership Emirates aims to provide deeper reach and better connectivity for our passengers in Central & South Africa. At the same time, we see an opportunity for TAAG Linhas Aéreas De Angola passengers to benefit from Emirates’ global network,” said His Highness Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group.
“We see huge potential in Africa, and are keen to continue playing an active role in contributing to its economies. Emirates will continue growing our presence in Africa by opening new routes, increasing flight frequencies, and upgrading aircraft to meet the increasing demand,” he added.
Angola is Africa’s second largest oil producer with a strong mining sector, and is one of the fastest growing economies in the world, making it an attractive business destination. As African economies continue to flourish and develop, Emirates is well placed to contribute to this growth, by providing valuable air links that enable trade and tourism flows.
Emirates’ first point in Africa was Cairo, launched in 1986, and the airline has since grown a strong presence on the African continent, serving 22 passenger destinations today: Abidjan, Accra, Addis Ababa, Cairo, Cape Town, Casablanca, Dakar, Dar el Salaam, Durban, Entebbe, Johannesburg, Khartoum, Lagos, Luanda, Nairobi, Tripoli, Tunis, Harare, Lusaka, Conakry, Algiers and Abuja. It operates over 160 flights across the continent each week, connecting African economies and markets with Dubai and beyond to a global network of over 140 major cities.
The partnership with TAAG could be the first of a number of these strategic partnerships. While fellow UAE national carrier Etihad Airways is taking the route of equity investments and this week launched its new Etihad Airways Partners concept, Emirates believes non-equity management contracts are the best fit for its strategy. “Exploring mutually beneficial agreements with established carriers such as TAAG Linhas Aéreas De Angola is another key strategy [for the carrier],” noted His Highness Sheikh Ahmed bin Saeed Al Maktoum.
In our analysis we highlight the passenger flows on Emirates’ flights in and out of Africa. The data shows that the UAE carrier handled an estimated 4.38 million passengers on its routes in and out of the Continent in 2013, while also handling around 213,000 passengers flying between points within Africa. The chart, below, shows the ten largest markets based on estimated bi-directional O&D passenger demand on Emirates flights in and out of Africa.
Data provided by 
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