Debt-ridden African airlines need billions of dollars to modernize their ailing fleets and meet rising fuel prices to stave off competition from European and Middle Eastern carriers, a senior industry official said.

"The economies of most African countries are very weak and this is reflected in the airline industry with many airlines in Africa facing severe financial problems," said Nick Fadugba, chief executive of African Aviation Services.

"In fact many of them are on the verge of bankruptcy," said Fadugba, adding that several billions of dollars are required if they are to survive the next decade.

Fadugba was speaking at a news conference on Thursday, after a meeting of African aviation officials and leading financial organizations to discuss the funding of Africa's airline sector.

Africa contributes about two to three percent of the world's aviation market.

"Airlines in the Middle East, which are often funded by their governments who are cash-rich and pumping money into their airlines, are buying modern equipment and gearing up for the challenges ahead," said Fadugba.

"In many African countries, the Middle East airlines are coming into the market like elephants and sharks, and the poor weak African airlines are struggling to survive," he added.

Analysts say the global airline industry is projected to lose around USD$5 billion this year mainly due to escalating oil prices, security fears and slow recovery from the SARS virus.

Although Africa does have a few strong carriers, like Ethiopian Airlines, Kenya Airways, Air Mauritius, South African Airways, Royal Air Maroc and Tunisair, Fadugba said West African carriers were suffering due to civil unrest in the region.

For example, the Nigerian government is liquidating Nigeria Airways and will launch a joint venture with Virgin.

Fadugba said the key to survival for Africa's airlines was in forging alliances with each other through joint ventures and code-sharing.

He added that many international financial organizations are willing to fund airlines in Africa, providing the carriers can deliver sound business management proposals. African governments and banks must support the airlines as well.

"Aviation is a catalyst for economic and social development and until Africa's aviation sector is strong, the continent will continue to lag behind the rest of the world," he said.

(Reuters)