Despite the COVID-19 pandemic, which has ravaged many economies with Africa among the worst hit, the continent’s air travel could help to create at least 160.000 jobs and $1.5 billion more in economic growth, according to African Airlines Association (AFRAA). The pandemic, whose phase four-stage may have peaked, provides an opportunity for many of the carriers despite the fact that some airlines are grounded. Africa’s aviation to stimulate $1.5 billion economic growth, amidst challenges.
AFRAA is of the view that this scenario is likely to give the surviving airlines a fighting chance to rebound and thrive as air travel re-opens. It will provide consumers with lower fares, higher connectivity, and greater choice.
Economic benefits
The first step is to free up the physical airspace above countries. That space and the aviation industry are governed by the Chicago Convention. This recognizes the sovereignty of states to the airspace above their territory. They are mandated to provide air navigation infrastructure to guide flights in that airspace.
In return, they charge modest fees to recover their costs, like toll stations in the sky. But the fees vary wildly from country to country. The flight for a typical Boeing 737 over a distance of 950 kilometers attracts over-flight fees as high as $1.100 in Sudan and as low as $60 in Seychelles, says AFRAA.
Many countries consider aviation as a cash cow and milk it for what it is worth. In West Africa, countries work together and manage their airspace as one. Europe does the same. Other African countries AFRAA said should follow suit. “This avoids the duplication of equipment and costs, resulting in lower over-flight fee and hence, lower operational costs for airlines and cheaper tickets”.
The second step concerns access to markets. Africa has a structural weakness where there is poor travel between countries with great reliance on overseas airlines. During the phase of COVID-19 lockdown and restrictions, this translated to many Africans marooned in other countries.
With fewer flights, offering little intra-African travel, the airline industry is yet to reach its potential, which means that airports and airlines need to charge more per single use. It means inadequate airport infrastructure and a skills gap for both technical and management expertise.
All these are symptoms of a more malignant malaise. South African Airways has restarted operations after a hiatus of over seventeen months caused by bankruptcy protection. Kenyan Airways is heading back to nationalization after privatization that was initially hailed as a great success. Doing the same thing all over does not lead to different outcomes.
Africa’s huge market but small aviation business
Africa’s huge population of sixteen percent of the world’s population counts for nothing because the continent has less than four percent of the aviation service market. The proposed Single African Air Transport Market (SAATM) seeks to cure this by introducing a single aviation market across the continent. This removes restrictions to market access as well as those on airline ownership. IATA Director General Willie Walsh said in October he sees strong opportunities for Open Skies.
But SAATM has run into headwinds. Ethiopia has been accused of protectionism. Uganda has expressed disquiet over the potential domination of its fledgling air industry by more entrenched airlines.
Other governments are also loath to set their flag carriers free because they are a source of national pride. They are also important diplomatic tools. Ethiopian used its airline to transport tens of millions of doses of COVID-19 vaccines when other airlines were in hibernation.
Working together and freeing up the air travel industry to reach its potential should be likened to the proverbial rising tide that lifts all boats. Some airlines may initially experience a drop in market share, but the great benefits to the aviation sector will ensure the growth of air travel across all countries of the continent, as a vibrant aviation industry is capable of providing more jobs.
