Much ado about continental single air transport market

For the second most populated continent in the world, it is disturbing that Africa contributes the least to the global air transport market and its trillion-dollar economy. While African countries are never short of talking about opening up the space for air connectivity, a lot more still depends on actions and the sincerity of member governments, JOKE FALAJU reports.

African countries have several things in common – culture, beliefs, values, and traditions, among others. But despite this shared value, air connectivity has been the Achilles heel as the African aviation industry is faced with multiple challenges.

The continent has the second-largest population, after Asia, with over 1.54 billion people. Regrettably, African airlines currently contribute a relatively small amount to global air traffic, with estimates ranging from two to three per cent. Despite this, the potential for growth is significant, as Africa is home to 18 per cent of the world’s population and has a growing economy.

A perennial complaint among passengers has been high airfares. For instance, a round-trip flight ticket from Nigeria to neighbouring Niger Republic, is $2,268 (N3.4 million). Lagos to Accra, Ghana is about $479 (N718,500), Lagos to Lome, Togo is about N1.1 million, and from Kano it is N2.4 million.

Flight from Lagos to Cotonou, Benin Republic is about N1.4 million. A one-way flight from Abuja Airport to Ndjamena, Chad Republic, is about N1.2 million. To travel to Cameroon from Abuja airport, round-trip is about N1.6 million. These are countries that share boundaries with Nigeria, and have about 1-2 hours travel time. Unfortunately, the airfare is almost the same as travelling to European countries, which takes about six hours or more.

To tackle the challenge of air connectivity, 11 African Heads of States in 2000 endorsed the Yamoussoukro Decision (YD), which provides for the liberalisation of scheduled and non-scheduled air transport services within Africa and aims at removing restrictions on traffic rights, capacity and frequency between city pairs.

The YD has precedence over any multilateral or bilateral agreements on air services between State parties and focuses on internal market liberalisation and fair competition as key development strategies while also addressing safety, security and environmental challenges.

Liberalising intra-African air transport through the full implementation of the Yamoussoukro Decision would, among others, improve air connectivity, lower fares, ensure the sustainable development of air transport in Africa and its contribution.

The YD also provides for the full liberalisation of intra-African air transport services in terms of market access, the free exercise of first, second, third, fourth and fifth freedom traffic rights for scheduled and freight air services by eligible airlines.

It removes restrictions on ownership and provides for the full liberalisation of frequencies, tariffs and capacity. It also provides eligibility criteria for African community carriers, safety and security standards, mechanisms for fair competition and dispute settlement and consumer protection.

SAATM will ensure aviation plays a major role in connecting Africa, promoting its social, economic and political integration and boosting intra-African trade and tourism as a result. The SAATM was created to expedite the full implementation of the Yamoussoukro decision

The single air transport market will also guarantee the basic rights of the consumer with a dispute settlement mechanism through negotiation and arbitration, with a Board of Appeal and an Arbitration Tribunal to be established.

The International Air Transport Association (IATA), the umbrella body for major world airlines, has since expressed its full support for the initiative, as it will open up Africa’s skies and promote the value of aviation throughout the continent.

Open-air arrangements boost traffic, drive economies and create jobs. A survey by the body suggests that if just 12 key African countries opened their markets and increased connectivity, an extra 155,000 jobs and $1.3 billion in yearly GDP would be created in those countries.

Yet, about 25 years after the YD was adopted by member States, and seven years after SAATM was launched, implementation of this laudable initiative is still on paper, as many African countries continue to grapple with various challenges facing the industry.

A Market Analyst, Tewolde Yohannes, in a write-up titled: ‘Challenges Facing the African Airlines Industry: Regulatory, Economic, and Operational Barriers’ published on Airspace Economy, observed that the regulatory environment significantly impacts the success of African airlines. Unlike other regions, where open skies agreements have simplified air travel, Africa still operates under complex bilateral agreements that restrict competition and market access.

She noted that despite the YD, many African countries still impose market access restrictions, limiting airlines’ ability to operate freely, as most international air travel in Africa is governed by bilateral air service agreements (BASAs), which often restrict airline frequency, ownership, and pricing.

She highlighted other challenges facing African airlines, including high taxes and charges on airlines, as some of these charges make up about 50 per cent of the airline tickets. Limited infrastructure and poor Airport facilities are another key challenge, as 34 per cent of airports in Sub-Saharan Africa have paved runways, compared to 87 per cent in East Asia.

African airlines are faced with high operating costs occasioned by expensive jet fuel, costly aircraft and Bureaucratic hurdles. Low load factor and limited passenger demand. Low yield passengers, that is, many African economies have low GDP per capita, meaning fewer travellers can afford premium airline services, and restricted market competition.

To actualise the liberalisation of the African air market, the expert emphasised the need for governments to prioritise investment in modern airport infrastructure through Public Private Partnership, investment in traffic control technology, asserting that an efficient traffic control system can reduce flight delays.

The expert harped on the need to reduce operational costs and enhance airline efficiency as fuel cost can be reduced by establishing regional fuel supply hubs can lower jet fuel costs adding that airlines can improve profitability by optimising flight routes and using fuel-efficient aircraft adding that interline agreements and airline alliances can also help reduce costs and expand connectivity.

She called on governments to ease restrictions on foreign investment in airlines, saying successful models like Ethiopian Airlines, which operates as a profitable state-owned yet independent airline, could be replicated across the continent, adding that opening up aviation markets to private players will lead to better competition, innovation, and improved services.

Similarly, the General Secretary of the Aviation Roundtable and Safety Initiative, Mr Olumide Ohunayo, said SAATM has not gained momentum because most of the African airlines do not have a strong flag or National carrier.

He said, except for Ethiopian Airlines, Kenya Airways, Air Morocco, Rwanda Air, and Egypt Air, every other airline is just struggling, and there is a need for a National Air carrier to implement SAATM.

He added: “If you look at what is happening in the region, the West African route is very expensive because of the taxes. Some African countries charge up to 50 per cent of the ticket fare.

“African countries need to come into agreement on airport charges. There is a need to bring down the fares. It is merrier when more passengers are flying, and when there are more passengers, the whole of aviation’s ecosystem benefits.”

Ohunayo emphasised that for SAATM to gain traction, the region needs to coordinate itself, saying member countries of the Banjul Accord Group Aviation, comprising five countries, including Nigeria, Guinea, The Gambia, Sierra Leone, Liberia, for instance, can start their regional SAATM among themselves. French-speaking countries in the West African region can also team up to implement SAATM, and so on.

He highlighted factors causing the delay in implementation, including a lack of a strong carrier, a lack of a unified currency in the region, which makes exchange rates difficult.

To address this challenge, the aviation expert recommended the need for regional integration, tackling visa issues, improving airport infrastructure and reducing the cost of flight operations.

An Aviation Security expert, Group Captain John Ojikutu (rtd), also mentioned that although many African countries have ratified SAATM, most of them are not prepared.

He said: “How many countries in Africa or among the over 50 in the African Union have airlines? Among those that have, how many fly Continental or Intercontinental? As of 2021, when the Heads of States of the AU ratified SAATM, not up to 20 of them did the ratification, which was the second time. Not more than eight did the first ratification, and Nigeria was not part of it the first time. Even now that we have ratified, are we really prepared?”

He said that although some stakeholders have suggested having private airlines as a flag carrier, he wondered what the definition of a government-defined policy for a Flag Carrier is, and what the Nigeria Civil Aviation Regulations say about qualifying for being designated as a Flag carrier.

“These are the things that bring us into SAATM. For me, we are not ready, just as many other AU member countries are not ready,” he stated.

Ojikutu further mentioned that he was never in support of a National Carrier but Flag Carriers, which Nigeria does not have, saying Flag Carriers should not be self-defined but National defined by government policy and guided by or in compliance with the Nig CARs.

He said: “If you don’t have any, you should not be part of the SAATM, which will be for your benefit only and not the country. SAATM can get you into an Alliance with the foreign airlines and IATA. How many of our private airlines are being prepared for these by the government policy or are prepared by their compliance to the Nig CARs Economic Regulations in particular?”

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