Algeria, January 31, 2018

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African states launch single aviation market to boost economic growth

Nearly two dozen African countries launched a single aviation market on Monday, a potential boon for the industry in a region where it is hampered by government protectionism, high taxes and stringent regulation.

The Single African Air Transport Market would facilitate the free movement of flights between African countries by liberalizing frequencies, fares and capacities, breaking down barriers that have in the past increased costs.

It is an updated version of the Yamoussoukro Decision that was signed in 1999 to open up intra-African aviation routes. That agreement failed and compared to other continents air travel in Africa is expensive, restricted and dependent on bilateral deals.

On Monday, Rwanda’s President and African Union Chairperson Paul Kagame and his Togolese counterpart Faure Gnassinbge unveiled the open skies scheme, with Ethiopia, South Africa, Kenya and Nigeria among the signatories. A total of 23 African states signed the agreement.

“Airlines will be able to match demand. For customers, they will have more benefits because they will get as much services at a time they want, where they want,” Ethiopian Airlines’ Chief Executive Tewolde GebreMariam told Reuters after the deal was announced.

The state-owned Ethiopian carrier, the continent’s biggest by revenue and profit, has long lobbied for the endorsement of the scheme.

“Prices will also go down. Signatory countries will benefit with more tourism and trade - this means faster economic growth,” he said in the Ethiopian capital Addis Ababa, where the initiative was launched on the sidelines of an African Union gathering.

Industry bodies say heavy taxation and poor infrastructure meant African carriers had not developed as fast as they should to take advantage of predicted market growth.

In 2015, the International Air Transport Association (IATA) said the Yamoussoukro agreement had the potential to create 155,000 jobs and fly 5 million extra passengers a year around the continent.

That year, IATA said Africa’s aviation industry grew at 4.7 percent - faster than any other region, though growth is off a very low base. IATA expects passenger numbers to double to 300 million in the next two decades.

Reuters



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