The Director-General of the International Air Transport Association (IATA) Willie Walsh said that the full implantation of ‘Open Skies’ otherwise known as the Single Africa Air Transport Market (SAATM) would be beneficial for the continent’s carriers and the huge African market.
Walsh, who exclusively spoke to AirInsight at the recent IATA Annual General Meeting (AGM) in Boston, said, “I suppose what makes European airlines more efficient is the Open Skies in Europe which gave opportunities to new airlines and so-called legacy airlines and consumers have hugely benefitted from that and that is the result of Open Skies and that will also be beneficial for Africa which is fantastic. If you are restricted, you don’t have economics of scales like you have a bigger market and that highlights one issue and that issue is the opportunity that exists in Africa and if there are Open Skies in Africa it will benefit more African carriers to develop and grow”.
Nigeria signed up to the Single African Air Transport Market, (SAATM), the country is yet to fully implement what has generally termed Africa’s own ‘Open Skies’ policy. Countries that have signed up to SAATM include Benin, Botswana, Burkina Faso, Cabo Verde, Cameroon, Central African Republic, Congo Brazzaville, Cote d’Ivoire, Egypt, Ethiopia, Equatorial Guinea, Gabon, Gambia, Ghana, Guinea (Bissau), Guinée. Others are Kenya, Lesotho, Liberia, Mali, Morocco, Mozambique, Namibia, Niger, Nigeria, Democratic Republic of Congo, Rwanda, Sénégal, Sierra Leone, South Africa, Swaziland, Chad, Togo, Zimbabwe.
But Nigeria appears among 34 nations that have shown serious commitment to implementing the flagship project of the African Union Agenda 2063, an initiative of the African Union to create a single unified air transport market in Africa to advance the liberalization of civil aviation in Africa and act as an impetus to the continent’s economic integration agenda.
SAATM is expected to ensure that aviation plays a major role in connecting Africa, promoting its social, economic, and political integration, and boosting intra-Africa trade and tourism as a result. Many can adduce reasons for the slow implementation of the air connectivity policy in Africa by Nigeria, considering her enormous travel market in the continent which ranks behind South Africa, Ethiopia, Egypt, and Kenya.
IATA Director General Willie Walsh. (IATA)
As good as SAATM appears, Nigeria may be dragging its feet to full implementation because of the weakness of her carriers that are too small, weak to compete with airlines like Ethiopian Airlines, Egypt Air, Kenya Airways, Air Maroc, and troubled South African Airways. Speaking of protectionism by African governments concerning their airlines rather than allowing competition, the Walsh admitted that it is government policies in the region, stressing that IATA does not have a position on that but felt personally concerned about it as regards competition.
“Competing against yourself is not really good”
Walsh is of the view that airlines are open to competition, adding, “If you are competing against yourself, it is not really good. The market in Africa is an attractive market although it comes with its challenges like infrastructure, fuel supply issues with so much”. He berated the high taxation in Africa, describing it as huge including costs of operation which he stated make profits marginal or nonexistent. The whole of these, he reiterated has certainly not helped airline operations in Africa.
“Taxation is not going to improve the situation. Taxation just really takes away investment in new products, investment in expanding. Governments need to work on huge taxation. If you look at Europe, Europe has grown because of interconnectivity within Europe. Domestic connectivity within Europe is good same with international connectivity. While we have the widest connectivity in Europe, that has been made possible because of Open Skies and that is where consumers benefits in terms of prices because of the introduction of competition to the market. They get more opportunities and you also get more efficient airline systems. That’s why I think there is huge potential in Africa as a market. Growth, I suppose it will happen at some stage. But it is sad to see that many Nigerian airlines have gone and it is a huge market. The competition is allowing people to expand”, he added.
The IATA DG took a swipe at the high cost of the PCR tests in Africa and explained that the group had been very consistent with the high cost of testing in Africa. He stated that IATA criticizes governments every day as regards the cost of testing which to him is astronomical.“We have not seen success. It has been very disappointing that governments didn’t respond because there is no justification behind the high prices that they have been charging. A lot of people have been affected by that. We are beginning to see some actions taken but forcing people to take expensive PCR tests to a cheaper and convenient Antigen. They are identical but you get the Antigen test result straight away. That is the disappointing aspect of it. I am of the opinion that governments will eventually give up”.