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Africa still lagging in open and transparent airspace access

10th April 2015

By: Anine Kilian

Contributing Editor Online

  

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Despite being home to 12% of the world’s population, Africa still accounts for less than 1% of the global air service market, says Nedbank Capital head of aircraft finance James Geldenhuis, citing World Bank statistics.

He notes that, in a study entitled ‘Open Skies for Africa – Implementing the Yamoussoukro Decision (YD)’ – the YD being a regional agreement intended to fully liberalise intra-continental air services among all African nations who are party to it – the bank cites the continued restriction of air services over many African countries as one of the key contributing factors to Africa’s apparent inability to capture its fair share of global air traffic.
“Even a cursory glance at the growth in market share of the air service market by European countries and the US since the adoption of the YD in 1999 appears to confirm this,” he says.

Geldenhuis adds that the intention behind the YD was primarily to replace bilateral air use agreements with open and transparent airspace access for the benefit of all stakeholders in the air service market.

The vast majority of countries in Europe and America, he notes, were quick to sign and implement the YD, and have subsequently derived significant benefits – ranging from lower barriers to entry and better price structures owing to increased competition – and steadily increasing passenger numbers resulting in sustainable growth and profitability for their commercial aviation industries.

“By contrast, very few African countries have adopted the open skies policies espoused in the YD, and the negative consequence of this has undoubtedly been evidenced in Africa’s inability to grow its share of international and, even, intra-continental commercial air traffic,” he says.

While some progress has been seen in recent years in terms of certain aspects of open skies policies being adopted in Central and West Africa, the skies over Southern Africa, with the exception of South Africa, remain largely closed to free commercial use.

Ironically, he notes, international carriers currently enjoy more airspace rights than most intra-African airlines in these Southern African regions, caused largely by lingering protectionism and fear of competition within many African countries.

“These fears need to be overcome if Africa’s airspace is to be fully liberalised so that commercial aviation can become an effective enabler of economic growth,” he says.
Geldenhuis states that a key challenge to truly open skies over Africa appears to be national pride. The vast majority of countries place a priority on having national airlines, or flag carriers. Unfortunately, while these flag carriers may contribute to national pride, international history has shown that they are often too cumbersome and weighed down by regulatory limitations to be able to effectively compete with other commercial airline companies.

“For many countries in Africa, the short-term solution to this problem has simply been to place restrictions on those competitor airlines, typically by limiting their free use of airspace, thereby enforcing a measure of monopolisation by the national carrier,” he points out, adding that while this restriction of competition may seem like a logical way of securing the sustainability of a national airline, the opposite is true, since a lack of competition almost always results in unfair consumer practices and the eventual collapse of the monopolistic entity.
“The need for Africa as a whole to recognise the unsustainability of such aviation business models is becoming increasingly pressing, particularly given the fact that, without open skies, the continent will never realise its full global economic potential,” Geldenhuis explains.

He comments that strong government leadership is required that has the best interests of the African countries, and the continent, at heart rather than merely pushing financially unviable flag carrier agendas purely for the sake of national pride.
“Another challenge that requires intervention by African governments is the restriction placed on many of the continent’s airlines by the European Union banned list,” he says.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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