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March 2018

February 27, 2018

 

 

The big news for the African airline industry this past month was the launch of the African Union’s Single African Air Transport Market (SAATM), with 23 countries already signing on.

The SAATM is expected to do away with restrictive bilateral agreements, where the number of flights, type of aircraft and capacity are all strictly controlled and negotiated by the respective governments. These bilaterals allow Africa’s governments to guard their poor performing state-owned ‘flag’ carriers for pride and personal interest, as well as from the threat from foreign carriers, particularly the Gulf Three and Turkish Airlines. The strange thing is that African states have more liberal agreements with countries outside Africa than they do within the continent.

These protectionist barriers have persisted despite no less than three prior commitments by African states to open their skies – the Yamoussoukro Declaration of 1988, the Yamoussoukro Decision of 1999 and then the ‘solemn declaration’ of 2015.

There have been absurd spinoffs. Particularly in west Africa, it is easier, faster and cheaper to get to a neighbouring country by air if you travel via another continent. What should take a few hours can take days.

It’s no surprise then that the SAATM has been reported with such optimism. It will allow carriers to fly directly between all signatory African countries, without having to link through their home hub. And it will take corrupt politicians out of the loop, negating political meddling. For South Africa, stuck at the bottom of the continent, things could improve drastically. South African airlines could, for example, link a country in east Africa with another in west Africa, without having to fly via the southern tip of the continent.

But the SAATM will mean the survival of the fittest. There will be consolidation, and many loss-making airlines will be outcompeted. For the governments who stubbornly protect their flailing flag carriers, it’s bad news. But it’s what the African population desperately needs if it is to realise its economic growth and connectivity potential.

The SAATM was launched with 23 signatory countries and IATA, which has been a driving force behind efforts to open Africa’s skies, frequently states that if just 12 key African countries, opened their air traffic markets, an extra 155,000 jobs and US$1.3 billion in annual GDP would be created in those 12 countries

But why should SAATM succeed where Yamoussoukro failed? The Yamoussoukro Declaration and Decision lacked an underpinning regulatory text to facilitate implementation, according to IATA. The SAATM provides this framework for the adoption of regulatory texts, by dealing with the issues of competition and consumer protection and dispute settlement, to safeguard the efficient operation of the market.

I’m only tentatively optimistic. African governments have paid lip service to open skies for three decades and little has changed. Furthermore, the SAATM forms part of the AU’s 2063 Agenda, so even if Africa sees full implementation on schedule it will be 45 years from now – and over 70 years since Africa first attempted to liberate air travel.

But then 2018 has already seen the successful launch of SpaceX’s Falcon Heavy, sending a Tesla Roadster into orbit around the sun, and the resignation of Zuma – exciting times lie ahead.

 

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