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African air transport liberalisation, cooperation key to growth – AASA

African air transport liberalisation, cooperation key to growth – AASA

Photo by Duane Daws

18th October 2013

By: Natalie Greve

Creamer Media Contributing Editor Online

  

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Intensified coordination between Africa’s policymakers and industry, together with greater inter-State cooperation, is urgently required to jumpstart the stalled liberalisation of air transport on the continent, industry association, the Airlines Association of Southern Africa (AASA) has asserted.

Addressing the organisation’s annual general assembly on Friday, AASA CEO Chris Zweigenthal urged African governments to adopt new visa rules, open their markets to investment and competition, implement the internationally benchmarked aviation safety standards agreed upon at the African Union, and align their emissions policies with multilaterally agreed guidelines.

“Without this change, Africa’s much-vaunted economic growth explosion will remain unfulfilled,” he commented.

Zweigenthal further proposed that South Africa’s new model for cooperation between airlines and service providers could become a template for other African countries.

“While Africa is home to some of the world’s fastest-growing economies and about 12% of the world’s population, the continent will ideally need to increase its share of global air traffic from 3% to 12% if airlines are to enable and sustain economic growth.

This would require a 27% growth in yearly air traffic over the next ten years, or, if the market share target was halved to 6%, an 18% yearly growth rate over the same period.

“This indicates the size of the task if we want to attain parity with our international competitors. But these targets seem to be unrealistic given the current dynamics of our industry. We cannot spread our wings when we are constrained by conservative government policies,” said Zweigenthal.

Further compounding the growth challenge were high input costs, most notably jet fuel, which accounted for between 30% and 40% of airlines’ direct operating costs.

This, together with inflated user fees charged on infrastructure and a range of other taxes, deterred travel, dampened demand for air freight and, ultimately, hindered economic growth.

“In addition, many African governments stubbornly cling to closed and regulated market regimes and exercise inconsistent immigration requirements.  These restrict investment, block competition and hamper trade and the development of air transport,” he said.

Zweigenthal believed that African administrations needed to work closely together to harmonise fragmented regional markets.

“When it comes to keeping costs down in South Africa, there is a renewed sense of understanding between the airlines, Airports Company South Africa, Air Traffic Navigation Services, the South African Weather Services and the South African Civil Aviation Authority.

“However, we need to translate this cooperation into realistic results with mutual benefits and rebalanced rewards.  As we prove the success of this approach, the template could permeate throughout Africa,” he said.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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