The slow journey to reaping benefits of Africa’s open skies

KCAA director general Gilbert Kibe: We are not there yet. file photo | nmg 

By MUTHOKI MUMO

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Summary

• The Kenya Civil Aviation Authority (KCAA) head Gilbert Kibe estimates it will take up to 10 years to realise full gains.
• Under the umbrella of the Single Market, cross-border flights will be treated as domestic flights for taxation and regulatory purposes. 
• Airlines will also be granted fifth freedom rights, meaning a flight from Johannesburg can stop by Nairobi and pick up passengers on its way to Cairo.
• This will all serve to drive ticket prices down and increase connectivity on the continent.

Three decades after the plan for open skies in Africa was mooted, 23 countries on the continent this week launched the Single African Air Transport Market in Ethiopia.

Driving the single air market is the dream that Africans will be able to fly across the continent seamlessly and cheaper than the prices that the current protective markets will allow.

Despite the celebratory mood, however, the launch of the Single African Air Transport Market (SAATM) does not mean travellers will automatically crisscross the continent.
On the runway to take-off are a number of significant steps that signatories have to take in realising this dream.

“We are not ready to start today. It will take a bit more time to achieve the vision,” said the Kenya Civil Aviation Authority (KCAA) director-general Gilbert Kibe.

Mr Kibe said that it would be at least a decade before the full dream of the single market was realised.

Under the umbrella of the Single Market, cross-border flights will be treated as domestic flights for taxation and regulatory purposes. 

Airlines will also be granted fifth freedom rights, meaning a flight from Johannesburg can stop by Nairobi and pick up passengers on its way to Cairo. This will all serve to drive ticket prices down and increase connectivity on the continent.

While the African Union aims to erase the tedious bilateral service agreements in favour of a multilateral protocol to govern SAATM, Mr Kibe says that countries in the region are still far from it.

Initially, countries will still need to negotiate bilaterally but with the aim of providing each other’s airlines the higher level of privileges required by SAATM.

As these agreements fall into place and convergence points are found, the multilateral protocol will be adopted.

There already seem to be early sticking points to future negotiations.

One of the reasons air travel is expensive in Africa is that nations often take a protectionist stance towards their carriers, according to 2016 research by the Common Market for East and South Africa (Comesa).

SAATM is envisioned as a fully liberalised and route competition is expected to cut costs of running airlines.

The regulatory text includes competition rules that would prohibit any agreement that “negatively affects the liberalisation” and requires “non-discrimination” against foreign carriers.

The Airline Operators of Nigeria said that the treaty has the potential to strangle smaller operators on the continent, according to a report by our sister publication The EastAfrican in a story published this week.

In a statement to the Business Daily, national carrier Kenya Airways

said that while it supported the vision of the single air market, it hoped that this would not come at the expense of airlines that do not get government subsidies.

READ: Africa on the runway to seamless airspace

“The current effort is laudable and transformational and Kenya Airways is in favour of this initiative provided it also addresses the market environment which is currently unbalanced between government-funded carriers and privately owned and managed airlines,” the airline said.

The competition regulations also have provisions for subsidies.

Mr Kibe said that African airlines would only have to compete among themselves as the privileges of SAATM would not apply to carriers from outside the continent.
The 23 countries that have signed on to SAATM represent more than 70 per cent of intra-African traffic.

Research shows that open skies would greatly boost economic growth.

According to the International Air Transport Association, if “just 12 key African countries” opened up their markets, 155,000 more jobs would be created while GDP would be boosted by $1.3 billion.