Case study privatization in African airlines industry

Abstract

Immediately after independence, most of the African countries realized the important role that air transport could play in the economic and social development. Consequently, African countries established individual national airlines. Although established with the laudable objectives to provide linkage not only among the various regions of the country, neighboring countries, with the colonial country and sub regional but also profitability as such was not of major concern of the airlines operation. In fact, the airlines were often viewed as "flag carriers" and national pride. African air transport industry will need more finance to renew the -current fleet and to cater for traffic growth. This financial requirement obviously cannot be provided by African governments as has been the practice. Therefore, for the survival of African airlines it is necessary to look at other sources of financing, such as the private sector. In the face of persistent difficulties in economic development, the African governments starred to profoundly re-examine their policies and to redefine the role of the public sector in production and provision of services. The objective of this exercise is to save money and to get rid of non-profitable parastatal enterprises especially those which were a drain on the country's meager resources. Therefore. privatization of African airlines become one of the solutions imposed or suggested to governments by financial institutions as a conditionality for assistance in the economic recovery.