Experts Identify Pitfalls of Open Sky in Africa

  • Experts Identify Pitfalls of Open Sky in Africa

Despite the gains enumerated by the International Air Transport Association (IATA) and the African Civil Aviation Commission (AFCAC) on the liberalisation of Africa’s airspace, known as Single African Air Transport Market (SAATM), experts have identified the pitfalls of the open sky policy.

SAATM, which will be adopted this week, is the actualisation of Yamoussoukro Decision (YD) that was conceived and endorsed by African states in 1988 and ratified in 1999 and it is the liberalisation of Africa’s airspace for free entry and exit of African registered airlines.

Industry operators and others insist that Africa is not yet ripe for the policy because many countries still want to protect their airlines against competition, while government owned airlines may have robust financing and could be resuscitated when it goes down, but it is not so for privately owned carriers, which presently dominate the African airspace as largely small operators,

The policy has been embraced by 23 countries, including Nigeria and its implementation would be kicked off this week in Addis Ababa.

The federal government has fully endorsed the policy and this means that it will open its sky for easy entry and exit of all African registered airlines.

But some industry operatives said that SAATM is being championed by few airlines in the continent that are bound to benefit from the policy at the expense of other airlines that are yet to develop large aircraft fleet and many destinations.

Many airline owners and service providers are of the view that while Africa may want to follow European Union and other regions that adopted similar policy (although YD predates the adoption of such policies in other regions) the African Union, which delegated AFCAC to implement the policy, has not done its homework well.

According to airline operators, for the policy to work in Nigeria, there should be uniform Customs duty and tariffs; all landing charges and taxes must be the same, no matter which country the airline is coming from or flying to. Every airline registered in the continent must be given equal opportunity and treatment.

“In the European Union tariffs are the same, landing and parking charges are the same and they even have single currency, but in Africa, each country is protecting its own airlines and when you want to fly to their country they will make it extremely difficult for you. Even when you obtain approval to fly to that country they will kill you with high charges but they come to Nigeria, pay almost nothing and take our passengers away. For example, what we pay for landing in Accra, Ghana is different from what African World Airlines (AWA) pay because AWA operates from Ghana,” an operator who own major airline said.

Speaking in the same vein, the CEO of Aero Contractors, Captain Ado Sanusi said that before the policy should be adopted AU should ensure that at least 70 percent of the countries in the continent have embraced the policy before they start its implementation.

Sanusi compared the open sky policy for Africa to globalisation, which he explained has the effect of encouraging dumping of goods by well developed countries on poor nations an noted that the policy is good because if fully implemented it would boost Africa’s economy and improve intra regional trade, but there are certain things that must be in place before it is adopted.

“For now there is no level playing field for all the airlines in the continent. All the countries involved must have a visa on arrival policy that is working, they should also give consideration to privately owned airlines and state owned airlines because the later has unfair advantage over the other. Government airlines have fair access to credit, they enjoy waivers and they are protected by government but privately owned airlines do not enjoy those privileges.

“Currently there is no level playing field if the Nigerian airports are charging $200 for foreign commercial fights that land in the country, while Senegal charges a Nigeria airline that arrives at Dakar airport, $5000. All these should be harmonised before the policy should be adopted for implementation.

He stressed that a country which airlines have average of 10 years life span like Nigeria should be weary of such policy, which is meant to kill upcoming carriers, but in a good climate, open skies is very good because it will boost intra African trade, tourism and connectivity,” Sanusi said.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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