Aviation: A unified air-transport market in Africa will spur code-share and joint venture with foreign airlines- Astral Aviation Boss

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African airlines may stand a chance of attracting partnership with foreign carriers with a single African market.

The Chief Executive of African cargo carrier, Astral Aviation and a TIACA board member, Sanjeey Gadhia, said with a single unified air-transport market in place, it is likely that foreign carriers will place more importance on co-operating with African airlines through code-shares and joint venture agreements.

A much-awaited Single African Air Transport Market will come into force in January 2018 and provide the opportunity for closer cooperation between African and foreign carriers.
The new agreement will include 23 of the 54 African countries and create a single unified market in Africa, together with liberalisation of civil aviation in Africa and so give an impetus to the continent’s economic integration agenda.

Since the declaration of the Yamoussoukro Declaration of 1988, in which many of the same countries agreed to the principles of air services liberalization, many of these countries are feet dragging on the implementation. In 2000, the Decision was endorsed by head of states and governments at the Organization of African Unity, and became fully binding in 2002.

According to atqnews.com, some of these countries have taken the initiative of implementing the decision. The Common Market for Eastern and Southern Africa (COMES) infrastructure ministers agreed on the need to fast-track the liberalisation of air space in the region to increase connectivity and boost trade. They say, air transport liberalisation will lead to increased air service levels and lower fares and, in turn, help stimulate additional traffic volumes and facilitate tourism and trade. Rwanda is currently leading the project to integrate and liberalise airspace in the COMESA bloc.

According to aircargonews.net, the much-awaited Single African Air Transport Market will come into force in January 2018 and provide the opportunity for closer cooperation between African and foreign carriers.

The new agreement will include 23 of the 54 African countries and create a single unified market in Africa, together with liberalisation of civil aviation in Africa and so give an impetus to the continent’s economic integration agenda.

Currently, foreign airlines operating into Africa rarely co-operate with local carriers with the exception of interline agreements in the form of SPAs (Special Pro Rate Agreements), Gadhia argued in TIACA’s latest newsletter.

Gadhi said that the new market would be a unique opportunity for TIACA and the African Airlines Association (AFRAA) to form a joint project to enable carriers from both associations to enhance their co-operation, he predicted.

Gadhia pointed out that, according to IATA, African carriers had the fastest growth in year-on-year freight volumes, up 31.6% in June 2017 while capacity had increased 7.6%.
He said: “Demand has been boosted by very strong growth on the trade lanes to and from Asia which have increased by nearly 60% in the first five months of 2017. Capacity grew 11.2% in the first half of the year.”

While seasonally adjusted growth has levelled off in recent months, the growth in the continent‘s airfreight market is set to remain in double digits for the remainder of 2017.
Despite this, however, “ Africa continues to face enormous challenges in its air-cargo development strategy due to the lack of liberalisation, restrictions on traffic rights, limited intra-Africa connectivity, lack of co-operation between African Airlines, high cost and taxes in fuel and airport services, inadequate infrastructure and lack of capacity building and training.”

It was “a sad-reality” that only 15% of the continent’s air cargo is carried by African-domiciled carriers.

Nevertheless, Africa will offer enormous opportunities in air-cargo to serve its young and growing middle-class population, Gadhia predicted.

TIACA priorities for 2018 would include lobbying for reduced taxes and active participation in AFRAA’s Route Network Co-ordination Project.

Also, atqnews.com reported that the President, African Development Bank (AFDB), Akinwumi Adesina recently urged all African countries to implement the 1990 Yamoussoukro agreement for open skies.

He said: “Rigid bilateral air service agreements have made it difficult to liberalize the regional aviation markets. We must make regional aviation markets competitive and drive down costs, raise efficiencies and improve”.

Ghanaian President Akufo-Addo has also lend his voice for the need for African leaders to fully implement the Yamoussoukro Declaration and liberalise their air spaces if the continent is to fully realise the benefits of air transport.

Africa is home to 12% of the world’s people, but it accounts for less than 1% of the global air service market.

Part of the reason for Africa’s under-served status, according to a World Bank study, Open Skies for Africa – Implementing the Yamoussoukro Decision, is that many African countries restrict their air services markets to protect the share held by state-owned air carriers.
The President therefore called on African leaders to commit to “full implementation of Yamoussoukro decision”

 

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