African airlines need robust governance to attract funding, says expert

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African airlines need better governance and stronger leadership to grow and attract funding.

This was the key message from Vijay Poonoosamy, Barrister and Partner of Dentons Mauritius, at the recent African Aviation Summit in Johannesburg.

Poonoosamy moderated a panel on ‘Aircraft Fleet Considerations & Legal Perspectives’ and participated in the ‘The Way Forward – Positioning for Growth’ closing session.

“Our continent’s national leaders must demonstrate their commitment to their respective national interests with integrity and allow government-owned African airlines to be effectively and efficiently run by professionals,” said Poonoosamy

“The national leaders who choose to do so will enable these national airlines and the related government entities in aviation to take off, thus enabling their countries to take off too.”

Shahid Sulaiman, Senior Partner, Head of Corporate of Africa at Dentons, added that countries that can create such a conducive environment for their airlines will allow them to have better chances of securing fair and reasonable terms for aircraft and financing.

” Both are crucial for providing the intra and inter-continental air connectivity Africa desperately needs,” said Sulaiman.

The 32nd iteration of the summit focused on the challenge of funding airlines in Africa – both existing carriers and start-ups.

International and African financial experts, along with senior officials from leading African airlines, discussed the current situation and sought practical solutions.

Poonoosamy believes that financial institutions and investors should consider providing funding and support to African airlines, particularly those demonstrating good governance and leadership.

“With more companies worldwide embracing ESG (Environmental, Social, and Governance) principles and the need to do both well and good, I urge aircraft vendors, lessors, and financiers to offer well-managed African airlines as attractive terms or even better terms than those offered to the well-established and profitable airlines elsewhere,” Poonoosamy said.

Sulaiman pointed out the interconnected nature of Africa’s socio-economic status and its aviation sector. “Africa’s socio-economic status is not where it should be and, as a result, African civil aviation is not where it should be either. This is because one impacts the other,” Sulaiman said.

“Excellent governance and the right leadership will help deliver safe, secure, viable, and sustainable African airlines, which will help African socio-economic growth, and which will also help these airlines in return in a virtuous circle,” Sulaiman said.

“The growth and sustainability of African airlines hinge on strong leadership and governance,” Poonoosamy concludes.

“Government officials should work towards implementing policies that foster strong governance and leadership in the aviation sector.

Financial institutions and investors, on the other hand, play a crucial role by providing the necessary funding and support to those airlines demonstrating good governance and leadership.

This, in turn, will drive the socio-economic development that is essential for the continent’s overall progress.”

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