Air fares are expected to drop more than 25% thanks to the newly launched the Single African Air Transport Market (SAATM).
The development comes only a fortnight after incumbent African Union Rwandan President Paul Kagame launched the Single African Air Transport Market (SAATM).
The SAATM is expected to cover 75% of Africa’s intra air transport and serve well over 200 million passengers per year.
Already, 23 countries have inked the pact to open up their skies. Opening the skies will create jobs, fasten Africa integration, improve tourism and reduce operational costs.
A survey by International Air Transport Association (IATA) showed that if only 12 key African countries opened their markets and increased connectivity, an extra 155,000 jobs and US$1.3 billion in annual GDP would be created in those countries.
IATA’s vice president for Africa, Rapahel Kuuchi, described launch of the SAATM as momentous and said it is an important step forward for the continent.
Rwanda, Kenya and Ethiopia
Gabon, Ghana, Guinea Konakry, Gabon, Liberia, Mali, Senegal, Sierra Leone, Benin, Burkina Faso, Cabo Verde, and Togo.
South Africa, Swaziland, Mozambique, Botswana
Experts say air traffic on the continent will grow by an annual average of 5.1% in the next 18 years, outpacing the global projected average of 4.7%, according to IATA.
Yet while more flights are linking big cities than they did are decade ago, most airlines based in sub-Saharan Africa are losing money due to stiff competition from Gulf, Turkish and European carriers on transcontinental routes.
Of Africa’s big three carriers, only Ethiopian Airlines posted a profit last year. Kenya Airways and South African Airways suffered losses. Collectively, African airlines posted losses of around $700 million in 2015 and $800 million in 2016, and aviation experts at IATA and the African Airlines Association (AFRAA) say this trend may continue.
To make the air travel industry profitable, African countries need to liberalize air traffic, according to IATA and the African Union.
As far back as 1999, 44 countries agreed in Yamoussoukro, Côte d’Ivoire (the Yamoussoukro Decision) to deregulate air services and promote the opening of regional air markets to transnational competition. Since then, however, implementation has been slow and inconsistent. Industry experts often criticize African countries for having more bilateral open sky agreements with partners outside the continent than with African partners.
IATA has warned that protecting small, fragmented and closed markets could end up hampering the development of air services by limiting their potential to contribute to development and economic growth. At the same time, experts are urging African countries to create more airlines, especially low-cost carriers, to serve the continent’s internal air transport needs. Were African airspaces to be fully liberalized, there would be better services, cheaper fares to stimulate additional traffic and greater trade flows, an IATA study found in 2014.
“Opening borders, lowering barriers and implementing the open skies agreement is always favourable to the industry,” Alexandre de Juniac, IATA director general and CEO, told Aviation & Allied Business Business Journal, a magazine that focuses on African airlines news. “There will be winners and losers, but it will be favourable because it will boost their traffic.”
The renewed push to implement the Yamoussoukro Decision is expected to usher in the Single African Air Transport Market (SAATM) in January 2018, with 40 countries expected to be signatories by then. So far 20 African countries out of 54, including Ethiopia, Kenya, Nigeria and South Africa, are committed to implementing the policy.