Podcast: Africa’s MRO Takeoff: New Horizons Or False Dawns?

James Pozzi, Keith Mwanalushi and Mark Pilling discuss Africa’s developing MRO market and whether the continent can get the investment into infrastructure and capabilities to foster a competitive aftermarket environment.

James Pozzi (00:16): Welcome to the MRO podcast. I'm James Pozzi, MRO editor for the EMEA region. On today's episode, we are focusing on Africa and looking at the continent's commercial aftermarket and examining where it is growing, the activities of some of its commercial MRO players and what opportunities and challenges may lie ahead. The Africa region, which although relatively small on a global scale, is projected to have a spend of $4.1 billion U.S. dollars in 2025, according to Aviation Week's fleet and MRO forecast data, with just under 50% of that total spend generated by engine maintenance. So joining me for today's episode are Keith Mwanalushi, a name familiar to many as a regular Aviation Week and Inside MRO contributor. Keith, among many other topics he covers, regularly writes Africa-related MRO news and features for us. Also joining us today is Mark Pilling, managing editor of several Aviation Week Network titles, one of which is African Aerospace. Mark has covered the global airline and aviation industry for 25 years. Keith, Mark, welcome and great to have you both join us.

Mark Pilling (01:22): Thanks James. Nice to be here.

Keith Mwanalushi (01:24): Thank you James. It's a pleasure to be here. Thanks.

James Pozzi (01:26): Excellent. Let's start with Mark. So Africa, as I mentioned, accounts for a relatively small part of the global share of the aftermarket, but there seems to be some real growth opportunities there and certainly regional players are getting excited about, but how would you describe the current environment of Africa's aviation industry in 2025?

Mark Pilling (01:48): Yeah, thanks James. Yeah, Africa as a whole, yes, is definitely growing along with the rest of the industry. It's well past post-pandemic highs, so we're well into that sort of period. IATA is forecasting 8% RPK growth this year, just a little bit less ASK growth, so load factors will improve. It's also going to be a profitable industry as a whole. Africa this year, according to IATA, about a hundred million dollars, which sounds pretty pathetic in global terms, but at least it's a profit. Africa has been periodically very unprofitable. That will be driven by just a few of the bigger carriers, of course, because there are dozens of carriers across the 54 African nations, many of which are very small, and the continent is dominated by the few of the big players, which I'm sure we'll talk about, which also dominate the MRO picture. (02:40): It is a very fragmented market. It's a very high cost market, a relatively low propensity to travel. Airlines have found a big issue with getting aircraft, the scarcity of parts. Scarcity of MRO scale is an issue. We'll talk about that, won't we, Keith in Africa. And there's a very wide disparity between airlines but big potential in Africa. You mentioned some of the numbers, James, and that's what people point to in Africa. The key always is how do we get to unlock that potential, whether it's regulatory change through the single African air transport market, which is extremely slow, or just generally airlines having better businesses and better supported and better investment. Hopefully that gives you a flavor.

James Pozzi (03:24): Absolutely. We'll bring in Keith because I know you both want to maybe talk about some of the regional players and the MRO capability being bought into the region. Keith, where is investment taking place in Africa, and are there any specific countries maybe emerging as aftermarket players?

Keith Mwanalushi (03:39): Thanks James. Well, aside from the major centers in Egypt, Ethiopia, South Africa and Kenya, there are some notable developments that are happening elsewhere in Africa too, and I think it's important to highlight them in Morocco, Angola and Zambia, there's developments there. Investment is a mixed bag, but mostly coming from China. I thought maybe I should just give you a couple of examples here. So Aerotechnic Industries, ATI in Morocco, they've built up full base maintenance capabilities on the 737s, A320 families. ATI links to AFI-KLM. So investment decisions are probably coming from France or elsewhere from overseas. Angola is seeing huge infrastructure development in airports including maintenance and engineering facilities. Investment is likely coming from China like most parts of Africa. Zambia opened its first third-party line maintenance provision recently. I spoke to them recently, and the plan is to expand to heavier checks in due course as demand grows. I believe that's from internal investment, and of course there's Ethiopian Airlines, they've just invested 150 million in MRO facilities in partnership with several Chinese entities. So that suggests Chinese investment there too.

Mark Pilling (04:49): And just to add to Keith's note there, I mean I've noticed we have written about in African Aerospace and Keith reported on this too, that Nigeria too, there are some MROs being planned and there's been some sort of earth dug in the last year or so. XEJet and Abuja has been having a facility. They're going to bring United Airlines of Nigeria looking at something. Ibom Air has capability itself and wants to develop more. So I think Nigeria has a lot of potential as well.

James Pozzi (05:19): Interesting. Yeah, a lack of airline capability MRO has been cited before in relation to Africa. Obviously Keith before I mentioned Ethiopian, their airline within house MRO capability that have really stood out in some of the things they are doing in the aftermarket. As you mentioned, building new hangers, adding capability. Are airlines in Africa typically or are they investing in-house? Do you see a lot of that from airlines, or is there still a culture I guess, of sending work and outsourcing it abroad?

Keith Mwanalushi (05:51): Well, traditionally or typically, whichever way you look at it, the trend has always been to outsource work, but there's definitely a growing appetite to invest in-house. Absolutely. I spoke to the CEO of Jambojet recently, Karanja Ndegwa. He says the airline has its own internal capabilities for the Dash 8 Q400s. It began line maintenance a few years ago and started base maintenance just last year. They actually have a second Dash 8 undergoing C check right now. I believe a third is either undergoing or be out of the hangar in September, the third C check. The plan for them is to offer Q 400 checks to third parties by 2026. So there is an appetite for in-house capabilities, and it reduces a lot of their costs. And in the case of Jambojet, interestingly, they run their own full MRO facility and it's not associated to Kenya Airways, as many would assume. They plan to move that from a cost center to a revenue generator. Component repair capabilities is also an area that comes up in conversations a lot. I spoke to Kenya Airways earlier this year. They expressed interest in bringing some of those capabilities in-house. Jambojet as well is also investing in component shop capabilities as well as Ethiopian Airlines, of course. I'm guessing it's all tied to cost reduction and mitigating the supply chain problems in the industry.

Mark Pilling (07:08): Yeah, I would just to echo that, Keith, I would totally agree also, it is about getting control over your ability to operate not just in costs but in terms of lead times and just in terms of your ability to control your operation as you choose. I think the challenge of the smaller scale carriers is when they're looking at investment, obviously their first priority’s aircraft, so they're looking at paying the lease rents, their access to investment, their access to foreign currency might be limited. So they go for the aircraft first, they get that sorted. Then they might think, oh crikey, what about MRO? That's another level, another part of the business plan. Then you need an established carrier, you need established governance, you need to establish a civil regulator who perhaps wants to work with you in the country. You might need support from the country in terms of regional grants and investment bodies locally to help you with access to land and any grants, subsidies, let alone labor. We haven't even touched that. So I think it's definitely up there on that ambition list. It's how fast can you get to it and who do you work with to get there because that's another and not always easy because sometimes you need to go to foreign OEM providers to work with you to do that, and they might not see you as a top priority compared to other places in the world.

James Pozzi (08:26): Yeah. What would you identify, Mark first maybe and then Keith, what would you identify today as the maybe one or two biggest challenges for the African, I guess the aviation sector for the continent as a whole?

Mark Pilling (08:39): So I think just generally the challenge, I mean we can talk about Africa as a whole, but I think let's talk about MRO, about how do you get to that? I mean just getting in play with aircraft at the moment, just getting your aircraft that you need. I mean the fleet is about just over 1,500 aircraft, commercial aircraft in Africa at the moment, according to Aviation Week's fleets and MRO forecast data. Airbus predicts that there'll be another nearly 1,500, nearly double the amount of commercial aircraft, new passenger aircraft needed between 2025 and 2044. So there will be a net decrease of the existing fleet because of retirements, et cetera. But there's a large fleet in Africa. Most of it, apart from the big players, is maintained outside of Africa or by players quite near Africa. So I think challenge wise, it's about how can Africa find a business plan, perhaps even local collaboration between players, which really doesn't exist, to sort of achieve that economy of scale. Because Africa generally is subscale when it comes to MRO. Ethiopian, Egypt Air, SAA to some extent different, but is achieving that scale and then perhaps some partnerships. But it doesn't look, I don't think it looks too promising. People talk about it. Kenya and SAA in the past talked, but there is a lack of trust amongst African carriers generally. So I'm not that optimistic we're going to see anything radical fast. What's your thought, Keith?

Keith Mwanalushi (10:05): I do agree with you, Mark. Absolutely. I think it's a combination of old and new problems. When I spoke to the Jambojet CEO about this, I asked the same question and he flagged up talent retention and supply chain delays as the top two risks facing the airline over the next decade. And I think that resonates with other African carriers. What happens is typically the larger carriers will wait five years until your staff are technically trained and they have the experience, and then they'll start to lure them over, especially to the Middle East. So airlines in Africa have to be very innovative and competitive in their hiring policies, and that's very challenging when you're competing with an employer that has an endless pit of resources. The CEO at Jambojet also identified things like engine shop bottlenecks as really critical in the region. He said parts that took 24 hours are taking six to seven days to return. Engines are taking an average of 250 days. So it's forcing airlines like Jambojet and others to lease engines that's adding significantly to their cost base.

Mark Pilling (11:12): And I think that's a great point, Keith, and I think that that whole idea of access … Africa's often at the bottom of the food chain no matter what it says because of its scale, because of the risks sometimes that people see amongst African carriers. So being there, your leverage is low on that front.

James Pozzi (11:31): Very interesting. And about the talent issue that seems to be affecting every region, but to the varying degrees. And there's obviously different factors at play there with related to talent, but that talent trade is something that I've read about a lot in research and talking to people in Africa long-term. That could be a huge barrier, no doubt, because obviously you need the people in the shops.

Keith Mwanalushi (11:53): It is a very old problem. They've been talking about it for a very long time.

James Pozzi (11:57): Yeah, absolutely. Okay. So looking ahead, I know you both said that there's some challenges there and that there's definitely some things to address. Of course we know that. But Mark maybe looking at the future fleet modernization, for example in Africa, that will obviously have an impact on future MRO demands and the kind of work that is available, I guess to MRO providers. Will we see a big fleet modernization plan going forward in Africa in comparison to maybe other regions?

Mark Pilling (12:26): Okay, so yes, the answer of that as a yes, we've, with Airbus and Boeing, both forecasting a lot of new deliveries, slanted about 80% obviously to narrowbodies, less to widebodies. Obviously Africa as a market, there are some very lucrative longer and medium haul routes, but narrowbodies are where it's at. So we're already seeing the big carriers really going for lots of new orders. Ethiopian are starting to take delivery of A350-1000s. I was at the delivery last year of their first one. I think they've already got four in service. Egyptair is going A350s as well. Royal Air Maroc has a major fleet modernization coming up. They wanting to quadruple or something that fleet over the next sort of decade. TAAG has taken delivery of its first 787s, and there's more to come there. So Côte d'Ivoire is taking its first A330neo soon. We're seeing fleet modernization everywhere, and African carriers can't get hold of as many aircraft as they want, whether it's narrowbody or widebody, right? So yes, we are seeing big fleet modernization across the board as well as some of the smaller carriers. So Airlink in South Africa with the Embraers, the E2s, right? Is that right Keith? Let me ding-dong from Paris there.

Keith Mwanalushi (13:45): E2s, yeah.

Mark Pilling (13:47): We're seeing carriers with a good business plan, with good profitability, with the trust of lessors increasing, they can access aircraft, they can access those modern fleets, and that's the persuasion and that's what carriers are looking to do, so that they can compete not only within Africa, against their cousins and their brothers, but also with the Middle East carriers, with Turkish. Everybody sees Africa as a very lucrative market if you're outside Africa. So you have to be able to compete toe to toe, and that is not easy with the likes of the Big Gulf Three and Turkish.

James Pozzi (14:24): Absolutely, yes. And onto the MRO side, just bringing in Keith for the final question. Is there a realistic possibility or an ambition in the continent that Africa can become an exporter of MRO services long-term given I guess the competition in the aftermarket from Europe and the Middle East?

Keith Mwanalushi (14:45): Well, James, in my lifetime, I don't know. I think once Africa is able to unlock its full potential, it could create opportunities for these kinds of things to happen. I think the main areas will be cost, developing the infrastructure, having a consistent supply of the right technical skills and proven industry confidence. I think that will take some time. I think the potential is there. We see that already with some of the countries that we've mentioned here today, like Egypt and Ethiopia. More widely, the possibility might start from a regional scale, but in the long term, perhaps some of us would've retired by the time that comes to reality.

James Pozzi: Many years away though, right?

Mark Pilling (15:28): I would agree, Keith. I think the chances of that happening are very low. I think you'll see the biggest established players really see, because they want to control their own destiny, so they will really develop their own capabilities as much as they can. As they get the opportunity for third-party work, they'll go for it, but not at the expense of making sure that their own fleet is right up to speed and maintained as they choose and as they want.

James Pozzi (15:54): Excellent. Yeah, a lot packed in, of course, in under 20 minutes. So Keith, Mark, thank you very much for giving your insights on Africa and hopefully we'll have you back very soon on the MRO podcast.

Keith Mwanalushi: Thank you, James.

Mark Pilling (16:06): Thanks for having me, James. Thank you very much.

James Pozzi (16:09): Excellent. Thank you. And don't miss the next episode by subscribing to the MRO podcast wherever you listen to podcasts. And one last request. If you're listening to Apple Podcasts or on Spotify and want to support this podcast, please leave us a star rating or write your review. Thank you.