Aviation Business

AFRAA wants govt to develop policy for airlines ownership

Airlines, AON

African Airlines Association (AFRAA), has called on African governments to develop a policy that would enable their airlines to own airports in their countries or vice versa in order to reduce losses.

Director of Government, Legal and Industry Affairs, AFRAA, Mr Aaron Munetsi, canvassed this position on the side-lines of a recently concluded African Travel Market held in Lagos.

Munetsi pointed out that airlines on the continent, unlike their counterparts in Europe, America or the Middle East were operating at a huge loss.

AFRAA wants govt to develop policy for airlines ownership
African Airlines Association (AFRAA).

He attributed the loss to payment of landing and parking charges, en route charges, aviation fuel and payment on aircraft lease to lessors.

Ethiopian Airlines is the only carrier on the continent, which owns an airport at the moment, while Kenya Airways was also pushing for the same position through its government.

Munetsi declared that two most important components of aviation were airlines and airports, noting that unlike airlines, airports hardly close shop and called on players in the sector to develop an interest in airport construction.

He said, “Several airlines have collapsed in Africa in the past 10 years but I want you to point to one airport that has collapsed within the same period of time. I still, don’t know why people are not looking at setting up an airport rather than an airline.

“Airlines and airports are the most important components of the aviation industry; everything else is peripheral to these two.”

He also agitated for the implementation of the Single African Air Transport Market by African governments, saying that this would lead to growth in the aviation industry on the continent.

The liberalisation of civil aviation in Africa as an impetus to the Continent’s economic integration agenda led to the launch of the Single African Air Transport Market (SAATM).

The Open Sky an agreement, originally signed by 23 out of 55 Member States, aimed to create a single unified air transport market in Africa.

Africa is considered a growing aviation market with IATA forecasting a 5.9 per cent year-on-year growth in African aviation over the next 20 years, with passenger numbers expected to increase from 100m to more than 300m by 2026 and SAATM is a way to tap into this market.

The benefits of SAATM to African Countries include job creation, growth in trade resulting in growth in GDP and lower travel costs resulting to high numbers of passengers. However, not a few wondered if Africa is ready for a Single African Air Transport Market.

Africa has an estimated 76.6 million annual air travellers. According to the International Air Transport Association (IATA), by 2035, it will see an extra 192 million passengers a year for a total market of 303 million passengers.

The top ten fastest-growing markets in percentage terms will be in Africa: Sierra Leone, Guinea, Central African Republic, Benin, Mali, Rwanda, Togo, Uganda, Zambia and Madagascar. Each of these markets is expected to grow by more than 8 per cent each year on average over the next 20 years, doubling in size each decade.

The potential growth of the African air transport is further showcased by the fact that Africa is home to 16 per cent of the world’s population and yet only has a share of 2.2 per cent of global air passenger traffic.

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Munetsi lamented that only 19 per cent of air passengers were airlifted by African carriers from the continent, while airlines outside the continent transport the other 81 per cent, stressing that Africa could not continue to allow foreign carriers to dominate its airports.

He explained further that as of 2016, only Morocco and South Africa received more than 10 million passengers and tourists on the continent, while Atlanta Airport alone in the United States, welcomed at least 184 million passengers and tourists within the period.

He insisted that there was the level playing field for all airlines on the continent to thrive but declared that without cooperation, alliance and teamwork, airlines on the continent would continue to remain unprofitable.

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Ihesiulo Grace

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