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Interviewing Sean Mendis, The "AVIATION ENCYCLOPEDIA" on projections for the industry in 2021

Lets read a little about who our interviewee is.

Sean Mendis is a professional airline manager and amateur writer with a successful track record of conceiving and implementing aviation projects in Africa, North America, Europe and Asia.

Sean was part of the launch management team of Ghana International Airlines and served in a management role there 2005 till 2010. He then co-wrote, fund-raised and implemented the $50 million business plan for Africa World Airlines in partnership with Hainan Airlines of China. He led the certification team as the Chief Operations Officer and successfully oversaw the safe launch of flight operations in 2012.

The following year, he moved to Somalia to manage Mogadishu's Aden Abdulle International Airport for SKA International Group under contract from the Government of Somalia. In 2014, he moved to the UAE to successfully launch a new station for SKA's aviation business, including a state of the art jet fuel facility in Ras Al Khaimah. In 2015, he oversaw SKA's licensing by the UAE GCAA to takeover all cargo handling operations at Ras Al Khaimah International Airport.

In 2016, he was the Accountable Manager with Uganda CAA for SKA's new Air Operator Certificate-based in Entebbe. In 2017, he relocated his base to Malawi for family reasons, while continuing to be involved with SKA's aviation businesses in Africa and the Middle East on a part-time basis. In 2018, Sean returned to Ghana as Chief Operations Officer of Africa World Airlines to guide the airline through its next stage of growth and route expansion.

Sean is an "Aviation encyclopedia". You can find out more about Sean by visiting his website at SeanMendis.com.

Interviewing Sean Mendis

LS : As an Aviation expert, What do you think is needed to improve the aviation industry in Africa?

SM: I think considering "Africa" as a whole is the first mistake. Different countries in Africa have different priorities and consequently different areas where a focus on improvement is necessary. In general, though, Africa needs to begin to view air transport as something that is essential for development, rather than as a luxury. Globally, we have seen an explosion of air traffic growth as GDP per capita reaches the $1000-5000 range (lower middle income) and air traffic begins to grow at double the rate of GDP growth. Most African countries are now either in this range or on the cusp of entering this range, so the market is poised for huge amounts of growth over the next few years. If Governments are able to view air transport as a strategic priority, they can focus on improving aviation infrastructure for the private sector to then invest and innovate. 

LS : Would you say the aviation industry is still a viable industry? Why? 

SM : Of course aviation is still a viable industry if you are careful and flexible enough to run your business well. If you look at the entire continent of Africa, one of the best run and one of the very few consistently profitable airlines is based in Ghana, so it definitely can be done. However, the problem with airlines in Africa tends to be that those with a good business plan and expertise tend to struggle to raise funding, and those with funds available do not have a good business plan and lack expertise. The biggest reason for this is the lack of viable commercial borrowing in most of Africa - banks only lend at usurious interest rates, thus saddling startup airlines with ridiculous levels of debt and stifling their cash flow in the early stages when they need it the most. That means the only sources of funding are either international investors (which is often restricted by archaic ownership rules in many countries), multi-industry conglomerates for whom aviation is not a strategic priority, high net-worth individuals who often bring their own ego related baggage to the table, and national governments whose political priorities invariably triumph over corporate ones. Very few airlines in Africa particularly are set up with proper corporate governance structures and strategies to operate as sustainable businesses for the long term.


LS : Looking into the new year, what are your projections for the success of the domestic and international routes in Ghana. Do you see any chances of the industry going back to normal in 2021?

SM : The domestic industry in Ghana has already essentially returned to "normal" by the end of 2020. Domestic traffic in Ghana recovered completely in December 2020 relative to the record numbers in December 2019. The international and regional routes from Ghana will, however, take longer to rebound, given that global demand is down and many other countries have not managed their aviation-related policymaking during the pandemic as well as Ghana did. It is just now that other countries around the world are beginning to implement testing protocols similar to what Ghana and other African countries have been doing for the last 6 months and more. So no, there will not be a full recovery of international demand until probably 2022 at the earliest, but we will see some markets recover faster than others. I expect to see traffic to Europe take the longest to rebound, with the Middle East and North America traffic recovering earlier. Intra-African traffic is poised to recover the fastest, both due to the relatively more enlightened border controls as well as with the inauguration of AfCTA which will at the very least create some amount of bureaucratic traffic due to the secretariat being based in Accra.


LS : Defunct airlines or new startups, which do you think is possible to start operations in Ghana come 2021?

SM : I think there is definitely a place for at least one new entrant in the Ghana market in 2021. Although the market leader is in a dominant position with around 70% market share, the second incumbent is weak and there is potential for quick market share gains for a new entrant right now. There is also the likelihood of opportunities with new airports opening/reopening in Wa, Ho, Sunyani and possibly even Navrongo. There are a lot of people talking about entering with larger aircraft and a focus on international operations initially, but that is not the optimal model for the current circumstances - whether that is a private sector airline or a new national carrier. The opportunity exists in the current growth sector which is domestic, and newcomers ignore that at their own peril.


LS : Are state policies an influence on the development of air transportation in Ghana?

SM : State policies are a huge influence on the development of air transportation anywhere in the world, not just in Ghana. It is disproportionately so in Africa because the state accounts for so much of the economic activity, either directly or at least tangentially. States have tended to view air transport as a luxury product which was a soft target for increased taxation and high user fees for low-quality infrastructure. When states begin to look at the aviation industry as a free market driver of economic activity in multiple sectors and then take a more "hands-off" approach, they tend to see the sector grow much more than if they took an interventionist approach. Ghana is a good example of this, and to their credit, both political parties have supported free markets in aviation during their tenures. When the Government removed VAT on domestic air travel, kept low domestic taxes and allowed Ghana Airports Company Limited to build Terminal 3 with private sector funding, the free market ensured that quality infrastructure and services emerged from stakeholders as a result. The increase in domestic air transport volume undoubtedly served as a catalyst, both directly and indirectly, for overall national economic growth. Conversely, if there had not been investment in the improvement of airports and infrastructure, or if domestic travel taxes were significantly higher, fewer people would be travelling and thus doing less business, and the national economy would suffer accordingly. 

LS : Your recommendations for the industry in the new year

SM : I think 2021 is a year of huge opportunity globally for those who are flexible to identify and capitalise on new opportunities as they come available. The airline industry is fundamentally good at reinventing itself periodically, so I expect that this year will definitely show us who the long term winners and losers are likely to be from the pandemic. From a consumer standpoint, there will be the need to get used to biosecurity as the new normal for international travel, but also that travel is likely to be more affordable in the early stages of the recovery in each market.

For clarification: LS is Lizzy Sasu and SM is Sean Mendis

Source: gh-aviation