Michael Hamelink, CEO, Aigle Azur: Interview

Interview: Michael Hamelink

How has passenger traffic at airports in Algeria evolved in recent years?

MICHAEL HAMELINK: Passenger traffic in Algeria has experienced substantial growth in recent years. In 2014, for example, it grew by around 10% in large cities such as Algiers and Oran, with growth slightly under that rate for cities such as Constantine.

This growth can be attributed to several factors. First, we have seen a change in consumption habits among Algerians. Second, there has been an increase in the supply of airline seats on both national and international networks, while the facilitation of visa procedures issued by certain countries in Europe and Asia has also made it easier for Algerian citizens to travel overseas. Lastly, improvements made to the security situation and the financial upturn in the country have resulted in an increase in business travel.

However, growth in passenger traffic, which reached 7% in 2015, was in decline compared to the previous year. The growth achieved was mainly sustained by domestic air travel, which is estimated to have increased by 11% year-on-year. In 2016 passenger traffic is expected to remain sluggish, declining by around 3-4%.

There are several reasons for the decline in passenger numbers. The global slowdown in the oil price is one, while the increase in the price of currencies on the formal and informal markets, as well as the inflation and erosion of domestic purchasing powers, constitutes another. Lastly, we have also observed reduced consumer spending, as consumers are opting to save in response to the various programmes launched by the Algerian government, such as subsidised housing.

What do you see as the main prerequisites for Algiers to become a major transportation hub?

HAMELINK: The major advantage of Algiers lies primarily in its location, the country’s overall size and the geographic distribution of its airports. The development of certain African routes departing from Algiers is not limited to the transportation of passengers. It is possible to boost economic relations with other African countries and help satisfy broader economic imperatives. For example, the growth of Morocco’s airlines has been accompanied by the expansion of a network of companies and local banks in Africa in a consistent and progressive manner, boosting trade.

There are several key and significant strategic elements that Algeria should capitalise on in order to become a hub. First is the continued opening of longhaul and medium-haul routes and the multiplication of inter-company agreements with various airlines flying to Algeria. There also needs to be development of suitable infrastructure to serve connecting traffic as well as development of air cargo.

What reforms and strategies can contribute to the growth of the aviation sector?

HAMELINK: Gradually opening the air transport sector to the private sector and encouraging foreign investment while maintaining the 49/51 policy would boost growth. Algeria is now considered an exporter of tourists. We believe internal demand to be more than 15m tourists per year. The development of air transport will help recover some of this demand and stimulate growth, not to mention that air transport is the primary means for the development of Saharan tourism, crafts and local industries.

It is important to implement a strategy for air transport as a component of a more comprehensive plan for transport in Algeria which includes integrating economic specialisations – like freight and passenger traffic – for particular airports. Furthermore, airport infrastructure should be conceptualised and created with an intermodal model in mind.

With respect to regulation, there also needs to be an adaptation of regulations governing the activities of foreign companies to encourage the development of new lines and boost the role of Algiers as a future hub.