AFRAA Demands Progress On African Open Skies Liberalization

 - March 6, 2017, 4:05 PM
Ethiopian Airlines is one of the most successful in Africa, but generally carriers across the continent are being held back by restricted market access and other issues. (Photo: Bill Carey)

It is fast approaching 20 years since a November 1999 conference held in Ivory Coast at which 44 African states adopted the Yamoussoukro Decision (YD), which called for an open skies air transport policy across the continent. But at the recent Aviation Africa conference held in the Rwandan capital Kigali delegates heard that implementation is still far from complete and that Africa is failing to fully reap the benefits of liberalizing access to air routes.

“The challenges of liberalization are crystal clear. We need to embrace liberalization as a concept,” said Elijah Chingosho, secretary general and CEO of the Kenya-based African Airlines Association (AFRAA) in the conference’s opening session. He advocated that states willing to fully embrace the liberalization called for under the YD should press ahead with these policies and “forget about the rest.”

Rwanda was one of the original YD signatories and one of just 11 states to commit to implementing fully open skies. In Chingosho’s view, full implementation is now a “pipe dream” but he insisted it should remain a goal, claiming that it has delivered “significant economic benefits” to those that have stayed the course.

Fifteen states are now full signatories of the YD: Benin, Botswana, Cape Verde, Egypt, Ethiopia, Gabon, Ghana, Ivory Coast, Kenya, Nigeria, Republic of Congo, Rwanda, Sierra Leone, South Africa and Zimbabwe.

Opening Aviation Africa, Rwandan President Paul Kagame echoed Chingosho’s sentiments. “We remain focused on the growth of aviation in Africa, not out of necessity, but by choice,” he told delegates. “Removing barriers is not enough. We must consistently exceed expectations in order to [prosper] globally. The YD still needs to be fully implemented. Africa is more connected with other continents than it is with itself.”

Flagcarrier Rwandair is winning plaudits with its modern, 11-strong fleet, which includes two Airbus A330s and three Boeing 737-800NGs (with a fourth due to arrive this year). It flies to 19 African and Middle East destinations and has plans to expand into Europe, India and the U.S.

Chingosho has been a consistent advocate for liberalization despite growing competition for African carriers, especially from wealthier European and Middle East airlines. “Some 23 African countries have signed open skies agreements with the U.S., while very few African countries have fully liberalized their skies in compliance with the YD,” he said.

He cited the case of South African Airlines, which he claimed has stumbled along for decades with bail-outs totaling as much as $2 billion. “How can we liberalize airlines when we are overtaxing them?” he asked in reference to what he argued are unprogressive fiscal policies for air transport in some African countries.

Funds blocked by governments or other agencies in certain countries, often for ticketing and other services, are severely undermining profitability, according to AFRAA. “Some $1.8 billion of airlines' money is locked up in African countries,” Chingosho said. Separately, he alleged that the European Union is selectively imposing safety bans on some African carriers.

AFRAA also is concerned about what he views as an uncompetitive air transport cost structure in Africa. For instance, passenger charges at many airports in Africa vary from $40 to $120—significantly higher than the global average of $25. The price of fuel in Africa is 2.5 times higher than in the rest of the world, the organization claims.

With profits of $250 million in 2015, Chingosho pointed to Ethiopian Airlines as an African success story, claiming it is among the best airlines in the world. Its West African affiliate, Togo-based Asky, founded in 2010, now flies to 23 destinations, bringing intra-regional traffic in that part of Africa to 20 percent of movements, higher than the continent’s 12-15 percent average.

In 2016, the two fatal accidents on scheduled flights in Africa were likely terrorist-related, according to AFRAA. “This translates to zero safety-related airline accidents last year. There are efforts by various stakeholders to enhance a safety culture yielding positive results,” said Chingosho.

Founded in Accra, Ghana, in 1968, and now headquartered in Nairobi, Kenya, AFRAAclaims a membership of 37 airlines representing 85 percent of the total international traffic carried by African airlines.

“According to IATA, African airlines made a loss of $700 million in 2015, a record loss that was followed by another record loss of $800 million in 2016. This year is expected to [see the same losses] as 2016,” Chingosho reported.

“To reverse this state of affairs, the quest for a single aviation market should not be allowed to fail,” Chingosho concluded. “Failure would result in the African airline industry following the footsteps of the once-thriving African shipping industry, which has now virtually disappeared.”