Why are so many african companies uncompetitive on the global stage insights from the global airline industry

Abstract

This paper examines the question of why so many African firms are uncompetitive on the global stage. An integrated framework of firm-level and external factors was developed. This paper focuses primarily on the global airline industry and offers an array of external factors including slow implementation of the Yamoussoukro Declaration and protection of state-owned airlines, which have historically distorted the nature of competition and hampered the exposure of many airlines to âgenuineâ or fair competition. When shielded from competition, such firmsâ ability to transition to the global stage and outwit rivals is hampered. Furthermore, the study indicates that internal factors such as limited economies of scale and poor quality of services have affected some of the firmsâ ability to compete. With the notable of exception of airlines such as Ethiopian Airlines, South African Airways and Kenya Airways, the preponderance of airlines have struggled to compete. These factors help to account for the fact that African airlines equate to only 20% of all air traffic on inter-African routes. The implications of the findings are examined.