Despite the inherent benefits in the liberalisation of Africa’s skies which proposes free and fair access to all of Africa’s air transportation markets by all airlines in the continent, Chief Executive Officer and Managing Direcor of Airlink, Rodger Foster says the policy which was adopted in 1988 will remain an ideology unless fundamental issues inhibiting its implementation are addressed.
According to businesslive.co.za, the International Air Transport Association (Iata) and Muhammad Albakri’s persistence in trying to awaken African states to the plight of the aviation sector and reinvigorate the drive for liberalisation of Africa’s skies is laudable. It is a fact that aviation and air access in Africa has been pummelled by the Covid-19 lockdowns, more so than in most other parts of the world.
It is also a fact that most airlines in Africa were in financial distress long before this pandemic. However, we need to accept that it is highly unlikely that Africa’s private airlines will receive any form of financial assistance following Covid-19.
It is all well and good to bang on about slow implementation of liberalisation, but there are some fundamental inhibitors that have to be addressed before Africa’s skies will be opened. To give this context, the first declaration of intent to liberalise was the Yamoussoukro Declaration adopted on October 7 1988.
This was followed by a decision — the Yamoussoukro Decision (YD) — to implement the declaration adopted on November 14 1999. More recently, the African Union launched the Single African Air Transport Market (SAATM) initiative on January 28 2018 with the main goal being the full implementation of the YD. So for the past 32 years, liberalisation has been a talk shop.
And that’s where the initiatives come unstuck. It is impossible to have free and fair competition when the continent is awash with state-owned airlines, each totally dependent on perennial state subsidies. Africa is a vast continent and viable air access across the whole continent is essential to economic development and the creation of jobs. Africa has 54 states and more than 200 airlines.
However, despite a total population similar to that of India and China, Africa’s air transport markets are thin and undeveloped and incapable of supporting so many airlines. Viable and sustainable air transportation requires airlines premised on scale, and to achieve this entails radical rationalisation of Africa’s airlines and consolidation such that fewer sustainably viable more robust airline businesses emerge. This cannot happen naturally as long as there are subsidised state owned airlines impeding the establishment of a natural free market.
There are other barriers. Each African state has its own aeronautical authority and set of civil aviation regulations and technical standards. While based on a standard template promoted by the International Civil Aviation Organisation (ICAO), each is different. Where some recognise the sovereign integrity of their counterparties reciprocally, others don’t. There is no “standard” protocol.
There isn’t a uniform tariff regime across Africa entailing all aspects of charges encountered by airlines, including the cost of foreign operator permits, the inconsistency in requirement of audits for operational safety oversight purposes and the costs of these, navigational charges, approach fees, landing fees, airport handling fees, passenger taxes and levies, and so on.
In many instances the state competent authority has no idea how the airline industry functions and what “liberalisation” means in practice, especially with regard to air traffic rights between two states and the liberal concept of automatic air traffic rights between second and third states (referred to in airline speak as fifth freedom traffic rights).
Yet uninformed state officials make important decisions for and on behalf of a sophisticated and highly capital intensive industry, often giving away traffic rights that allow free market access to other African airlines without reciprocity, thereby jeopardising their airlines.
Perhaps the biggest inhibitor is the lack of antitrust capability and capacity. Competition law is complex and while credible in concept, it is quite another story in application. There isn’t commonality in antitrust law throughout Africa, and it seems some states take unfair competition seriously and others have a conflict of interest insofar as the state-owned airline is a perpetrator of antitrust whose behaviour is condoned.
SAATM and liberalisation of Africa’s skies will remain an ideology for at least another 32 years unless there is a single civil aviation regulation and technical standard regime, a single competition legislation with an empowered and accountable antitrust law enforcement agency, a set down standard tariff regime (for airline operational charges) that is fair and equal for all airlines across Africa, and … no subsidised state-owned airlines.
