A project to bring together African airlines under a unified operating structure has enormous potential to transform the African air sector and boost the African economic outlook more generally, according to the International Air Transport Association (IATA).
The scheme, called the Single African Air Transport Market (SAATM), was launched recently in Addis Ababa, and initially has the backing of 23 countries of the African Union (AU), the association that promotes the political and economic interests of the 55 African member countries, as reported in Air Cargo World.
However, airline commentators warn that experience suggests it is too early to be sure this latest initiative to transform the African skies will succeed. This is because the idea of harmonising the air sector across Africa has long been in the pipeline.
The brainchild of a SAATM was proposed in a declaration issued in 2015, but talks of liberalising the African air sector were first raised 30 years ago, in 1988, according to official African Union sources. It was the all-important Yamoussoukro Decision (YD) of 1999 that set the template for the development of the African air sector. This was a vehicle that would allow for the liberalisation and removal of many ownership and flight restriction issues pertaining to air travel within African countries. These included matters relating to eligibility of carriers, fair competition, security issues, dispute settlement and consumer protection.
According to African Business, despite the adoption of the YD declaration in 1999, signed up by 44 countries and fully binding in 2002, little progress was made. Some commentators suggested many African countries feared their national carriers would not be able to withstand increased competition. It was these concerns that stalled the development and implementation of the YD declaration.
The SAATM declaration of 2015 was a revival of the YD some sixteen years earlier. However, only 23 countries signed up, fewer countries than had originally agreed to participate way back in 1999. Nevertheless, African Union sources stressed in this 2015 declaration that once fully implemented, the YD will eventually allow for an effective common aviation area. This will do away with aviation agreements on a bilateral basis, but rules will apply on a continent-wise basis and airline carrier trade will based on market forces.
Moving to the official launch of the SAATM in Addis Ababa, almost three years after the original 2015 declaration, intra-African air connectivity should be enhanced with immediate effect, whereby eligible carriers have greater accessibility to fly between member countries.
Rwandan President Paul Kagame, recently elected Chair of the African Union, sees this project as a major plank of a much grander scheme to adopt a Continental Free Trade Area, as reported in Air Cargo World. He foresees the benefits flowing from such enhanced transport connectivity as multifaceted, enhancing trade and the movements of peoples within Africa and across the globe. Kagame was elected on 28th January 2018 to his new role, on a rotating one-year term basis, and he will pilot the activities of the Union throughout 2018.
IATA have long since extolled the virtues of closer harmony in African aviation. A study by IATA in 2014 assessed the benefits of implementing the YD decision. Report authors stressed the benefits to passengers and cargo shippers alike, and “the crucial role air transport plays in driving economic and social development in Africa through enhanced connectivity”.
The study considered liberalising air travel in just 12 African countries, and the overall economic benefits generated were anticipated to be considerable, raising GDP by $1.3bn annually.
Recent IATA data highlights the spectacular trend of airfreight demand across Africa. During November, growth in African airfreight outpaced any other region, registering an upturn of 24.0% compared to the same month in the previous year. However, Africa only accounted for 1.6% of overall global air cargo volumes, so the impressive volume growth must be put into context of overall cargo movements on a worldwide basis.
IATA warned that this initiative needs the full support of all the governments involved to have any hope of succeeding.
Henk Ombelet, Senior Consultant, FlightGlobal, stressed that any initiative to improve the aviation regulatory environment in Africa is welcome. Poor regulation has made it difficult to run air services on the continent, and consequentially this has restricted growth, he insisted.
He pinpointed the main outcome of the problem, “This has led to a situation where it was easier and cheaper to fly via Europe or the Middle East if you wanted to travel or send cargo between African countries. The low-cost revolution has also not yet started in Africa. This is partly due to the small market size, but also because it is just difficult to set up an international airline.”
He echoed some of the concerns raised by IATA. Ombelet urged, “If governments are serious about liberalisation this time, and support the measures, then it should have a positive impact; but experience from the past with the YD does not bode well.”
Ombelet suggests that if this initiative leads to consolidation in the African airline market, with fewer airlines operating on a more professional and profitable basis, this could enable African airlines better able to compete with foreign airlines flying in to the continent.
He added, “Cargo could benefit from this environment, but many of the key cargo flows are not between African countries but from African countries to elsewhere. It is the underlying freight demand, driven by the African economies that determines whether there will be more cargo.”
The SAATM declaration of 2015 proposed various institutions to implement the YD decision:
· A Monitoring Body to oversee developments
· African Air Transport Executing Agency
· African Aviation Tribunal to facilitate dispute resolution
· Dispute Settlement Mechanism
The overarching regulatory framework for aviation will fall under guidance within an African Civil Aviation Policy document, which details competition rules and other critical issues. The embryonic single market will eventually morph into a common aviation area, according to the African Union.