African Air Connectivity

By opening and connecting numerous markets, aviation has the potential to make a significant contribution to Africa’s development and economic progress.

This can facilitate trade and allow African enterprises to connect to global supply chains. Improving air transportation will raise production by promoting innovation and investment, as well as boost tourism and improve corporate efficiency and operations. While many aviation markets between the rest of the world and Africa have become more liberalized, the bulk of intra-African air markets remain mostly closed due to restrictive bilateral agreements that impede the development and growth of air services. In 1999, many African countries implemented the Yamoussoukro Decision after recognizing that the restrictive agreements were limiting growth. According to Njoya (2016), the 44 signatory nations that committed to this agreement deregulated their air services and promoted the opening of regional air markets to transnational competition. The realization of this arrangement has, however, been limited and slow and therefore, the potential advantages of liberalizing the intra-African air markets still remain largely unrealized.

Benefits of Liberalization

Taneja (2017) noted that there is substantial evidence that the liberalization of global air markets and transport has provided considerable benefits for the larger economy and the passengers. Liberalization of air transport in Africa can lead to lower fares and enhanced air service levels, which will in turn arouse additional traffic volumes, eases trade, investment and tourism and facilitate other sectors in the economy. Consequently, this will lead to improved productivity, increased employment, enhanced distribution and delivery, new markets and economic growth.

For example, the agreement between Kenya and South Africa, in the early 200s, for more liberal air transport and market led to a 69% growth in air traffic. Another example is Ethiopia’s pursuit of additional liberal bilateral. The Ethiopian Airline has become the most profitable and the largest airline in Africa. As a result, it benefits from 35-38% higher frequencies and 10-21% lower fares when compared to the restricted intra-Africa routes. On the other hand, potential benefits of liberalization for passengers include fare saving, greater connectivity, time saving and greater convenience.

To better understand the potential gains of Intra-African liberalization, an analysis was conducted by examining the outcomes of liberalizing the air transport between 12 countries in the four sub-regions of Africa. These included the North (Algeria, Egypt, Tunisia), East (Ethiopia, Kenya, Uganda), South (Angola, South Africa, Namibia) and West (Ghana, Nigeria, Senegal). The results were analyzed using the gravity model, which was developed by the InterVISTAS. The model forecasts traffic between two nations or groups of nations based on the nations’ economic characteristics, geographic relationship, trade levels and air service bilateral amongst the two nations. The results revealed that traffic impacts ranged from 51% increase in Nigeria to 141% increase in Algeria. In total, the traffic surges between these 12 nations were projected to grow by 81% after liberalization.

Liberalization impacts extend past the benefits to cargo shippers and passengers. The increased air transport and services will arouse employment opportunities in the industry. These include handling passengers, baggage and to maintain service and operate the aircrafts. Apart from creating jobs, liberalization will stimulate tourism within Africa, generating a projected US$1.3 billion in tourism spending (Schlumberger, 2010). The enhanced air service will also improve other areas of the economy through increased trade, investment, enhancing productivity and attracting new businesses.

Socio-Economic and Ethical Issues

The Yamoussoukro Declaration alone will not solve aviation problems in Africa. This is because there are many unresolved socio-economic concerns still challenging the aviation industry. One leading issue is the air safety, which has to be made the key priority moving forward. The average air traffic incidences in Africa in 2011 were approximately nine times higher than the average globally. The high rate of accidents is usually due to inconsistent enforcement and implementation of international safety practices and standards. To correct this, African governments have to foster greater oversight.

The hard and soft aviation infrastructure in Africa also significantly lags behind in comparison to the rest of the world. This includes insufficient traffic networks, lack of human and physical resources and poor airport facilities. Njoya (2016), concluded that it is critical for the African countries to invest in upgrading and building the infrastructure that supports the industry. Finally, alongside implementing the Yamoussoukro Declaration, African government should develop national policies for the aviation industry. These include waivers of airport fees and taxes for regional airlines and relaxation of the transit visa requirement for African nationals.

Conclusion

Liberalization of the air service industry is part of the global trend of privatization and market deregulation that has been employed to the railway, utilities, telecommunication, and other industries. Liberalization will present African air carriers with opportunities to develop new routes and grow their operations. However, there are concerns that it will harm the viability and profitability of existing carriers as a result of new contestants entering the market.

Liberalization provides an opportunity for competitive and efficient carriers to improve profitability by tapping into new markets, increase in traffic volumes, through consolidation and by accessing a larger pool of investments. Apart from air carriers, liberalization also benefits the passengers, trade, tourism, productivity, employment, investment, and economic output. However, to achieve this, African governments have to significantly invest in aviation infrastructure and to foster adherence to international safety regulations and ethical standards.

References

Njoya, E. T. (2016). Africa’s single aviation market: The progress so far. Journal Of Transport Geography, 50(Air transport liberalisation and airline network dynamics: Investigating the complex relationships), 4-11.

Schlumberger, C. E. (2010). Open Skies for Africa : Implementing the Yamoussoukro Decision. Washington, D.C.: World Bank Publications.

Taneja, N. K. (2017). Airline Industry : Poised for Disruptive Innovation?. London: Routledge.