Reality check: African airlines focus on overseas competition

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Africa's obsession with the Yamoussoukro liberalisation initiative is being tempered by more pressing issues as the continent's airlines battle to compete with growing competition from abroad

A number of chief executives used the African Airlines Association annual general meeting in Mauritius in December to openly question the relevance of continuing discussions on the long-delayed implementation of the pan-­African liberalisation initiative, the Yamoussoukro Decision.

The initiative is supposed to allow all African carriers to operate without restrictions on all routes of their choice within Africa. But with other more immediate issues to be dealt with to enable Africa's airlines to meet growing competition, particularly from carriers in Europe and the Middle and Far East, the continued pursuit of the "Holy Grail" of continent-wide liberalisation of the air transport market has become more contentious.

While no one suggests that this ambition should be abandoned altogether, there is a growing feeling that before such lofty aspirations can be fulfilled Africa's airlines first need to address the problems that beset individual countries and airlines. "Let us not be over-ambitious, but concentrate on what can be achieved," says Air Mauritius chairman Sanjay Bhuckory. "Yamoussoukro is like a preacher talking 52 Sundays a year on the same subject of aiming for heaven. The talking has to stop."

folly kossi
"Most African carriers will be eliminated from the industry if imbalances are not addressed"
Christian Folly-Kossi
Secretary general, AFRAA
Air Botswana chief executive Lance Brogden is more forceful. He condemns the endless discussions that have so far led ­nowhere, and proposes an alternative way forward. "Although the YD initiative had the best of intentions around 20 years ago, it is time that this debate was brought to an end," he says. "I do not believe that YD will happen in the way it was envisioned. The poor progress over the past two decades is proof of this. To rely on 'political will' and forums such as the African Union to make the liberalisation of the African skies come to fruition is not going to bring quick results.

"I propose that an organised process of ­liberalisation in regional pockets throughout Africa would make far better (as well as manageable and measurable) sense. Like-minded states in specific regions should move away from the archaic bilateral air services agreement system and seek modern-day, well thought-through liberalisation protocols and practices to enhance the sorely-needed air transport services in Africa. Once regions have made material progress, I believe there will be critical momentum that should ­support enhanced liberalisation between ­African regions and states."

Geoffrey Moshabesha, ICAO regional director for Eastern and Southern Africa, notes the frustration among airlines, but says the blame does not lie entirely with government. "I think some [airlines] are also to blame for the non-implementation," he observes. "Politically, the African ministers have committed themselves to the decision. The problem is that some officials, including airline chief executives, go back home and advise their respective ministers that they are not ready and still need to be protected. I have seen many of these airlines continuing to milk their countries of resources as a result of subsidies." Nevertheless, Moshabesha is convinced that "with time, it will work, and would be best for the African aviation industry".

John Morrison, chief executive of the Airlines Association of Southern Africa, adds: "We are still a long way from implementing YD, and not all airlines are in favour. But we cannot continue for another eight years. We have to act more and talk less."

Another strongly in favour of accelerating the moves towards the implementation of YD is AFRAA secretary general Christian Folly-Kossi, who considers it essential to the survival of Africa's airlines as international operators. However, he acknowledges that not all of the continent's 54 states will be able to fully open up their skies at the same time.

This is the reason, he says, that AFRAA proposed in 2006 the forming of the Club of the Ready and Willing states, which would take the lead in implementing the decision. Folly-Kossi believes that the recent offer by Nigeria's minister of state for civil aviation to call a meeting of ministers of those countries that have expressed a strong interest may ­advance the launch of this project.

David Kajange, head of transport and tourism at the African Union Commission, makes the point that the development of air transport is second only in priority to establishing lasting peace in Africa, and that the YD is considered a key element. He also highlights the necessity of first putting in place adequate competition rules, a final report on which is expected to be submitted to ministers in April. Until there are such rules, says David Tokoph, executive chairman of Interair South Africa, "we are not yet ready for intra-Africa 'globalisation".

Paul-Antoine Marie Ganemtore, project ­director air transport at the Economic Community of West African States Commission, also cites the lack of competition rules as one of a number of constraints to the speedy implementation of YD, alongside the establishment of an Executing Agency and rules on the settlement of disputes and protection of consumer rights. He also refers to scarcity of financial resources and poor co-ordination and co-operation between continental and ­regional organisations.

The consequences for airlines, adds Ganemtore, are: inequality of treatment discrimination deficiencies in commercial co-operation inability to be competitive ­financial weakness and risk of blacklisting.

One positive outcome of the Third Session of the Conference of African Ministers of Air Transport, held in Addis Ababa in May 2007, was the adoption of a resolution to entrust the African Civil Aviation Conference, an agency of the African Union, with the duties and powers of the long-awaited Executing Agency. This has yet to be formalised, but AFCAC president Chris Kuto says competition rules and economic regulation will be the first issues to be realised. The ministers also agreed that the AU Commission should explore "the possibility of providing financial assistance". According to Kuto, the present AFCAC ­budget is hardly sufficient to enable the ­organisation to meet its obligations.

At the same conference, the ministers failed to reach consensus on the adoption of a common African position for negotiation between the AU and European Union member countries. The EU Single European Sky concept, says Folly-Kossi, will introduce more competitive pressures on African carriers and, he argues, unless such imbalances are addressed speedily, "most African carriers will be eliminated from the industry".

The impact of driving African airlines out of business, Folly-Kossi continues, will be a dwindling of intra-African services, which will negatively affect domestic and regional trade. He urges that Africa should adopt a common air transport external policy to enable it to negotiate with the EU and other third parties as a single block. Such a policy, coupled with the implementation of YD, he believes, would pave the way for the consolidation of African airlines and increase their ability to compete.

In order to speed up the implementation of YD and enhance safety and security, AFRAA, AFCAC and Airports Council International-Africa have agreed and endorsed the creation of a Joint Council consisting of the heads of the secretariats of the three organisations. Kajange also welcomes the memorandum of understanding signed with AFRAA to make the organisation Africa's official voice of air transport, which, he says, will overcome the AU's rather limited scope. Given that since 1999 not a single text of Africa-wide scope on the YD has been adopted, it will be interesting to see if these new co-operative alliances will bring this visionary concept into being, or if it will be just another talking shop.

While continent-wide liberalisation remains tantalisingly out of reach, other more immediate challenges have to be faced, not least that of reversing a poor safety record. According to AFRAA, African airlines were responsible for a quarter of all fatal accidents worldwide in 2007. With only 4.5% of world passenger traffic, this level is unacceptably high, says Folly-Kossi. But progress is being made. Together with the International Airlines Training Fund and the EU, training is being provided to prepare airlines for the IATA Operational Safety Audit, says Folly-Kossi. About 12 African airlines have already passed IOSA and all AFRAA member airlines have gone through the "Gap" analysis and have contracted with one of the accredited IOSA firms to undergo the audit.

Uganda revitalises

Uganda has overhauled its air transport system with a new airline and major improvements to the Entebbe airport. Uganda CAA chairman Zephaniah Baliddawa says aviation in the country has been "floating" since 2001, when Uganda Airlines was liquidated. But the Commonwealth Head of Government Meeting, held in Uganda in late November, provided a catalyst for change.

Prior to the meeting, the international terminal building at Entebbe Airport was expanded, a new domestic terminal was opened, the airport's communications system was revamped and a new radar system for the Entebbe Flight Information Region was installed. Baliddawa says investors are now being encouraged to set up businesses in a new airport city, land for which has already been purchased.

Furthermore, the investment by the Aga Khan Fund for Economic Development through Celestair in a new airline, Air Uganda, has once again provided this landlocked country with connections to the neighbouring countries of Kenya, Sudan and Tanzania. Air Uganda launched in November and has a small initial network.

But with plans by Celestair to develop Entebbe into an East African hub, this de facto national carrier is expected to quickly extend its reach.

Over the past two years, 355 African airline employees have taken safety courses. In 2007, a grant was received from the EU through ­consultancy firm Pro-Invest, which paid for 12 training courses. Work continues on the ICAO COSCAP programme, and some African airlines intend to train and certify their maintenance personnel to European Aviation Safety Agency standards. AFRAA has developed a training curriculum to that end.

But it is the ageing fleet of aircraft on the continent that is still of greatest concern. Nearly a third of the total Africa-wide fleet of some 750 aircraft are more than 20 years old, including a prevalence of ex-Soviet types in certain countries. Without these, Folly-Kossi insists, Africa's safety record would be no worse than that of the rest of the world.

One of the objectives of the First AU Conference of African Ministers of Air Transport in 2005 was the "reduction of air accident levels to the world average by 2008", but this is unlikely to be achieved. However, there is better news on the horizon. Of the 480-strong fleet of AFRAA member airlines, only six are from the former USSR, while 154 aircraft are currently on order, indicating a marked trend towards fleet modernisation on the continent. This renewal process could be accelerated if the African Development Bank and other regional development associations provide a more decisive role in aircraft funding, says Folly-Kossi.

In spite of measurable progress during 2007, airlines in Africa continue to battle against under-staffing and under-funding, lack of critical mass, uneven competition with European carriers, predatory pricing by Middle Eastern carriers, and the poaching of pilots and cabin crew, also largely from airlines in the Middle East and Asia. AFRAA has called on the AU to set up an extraordinary air transport summit to address all the political hurdles and bottlenecks hampering growth and development. But is there the political will to merge the individual aspirations of these diverse nations for the greater good? On past performance, this appears unlikely.

 


The YD timeline

A general policy on air transport in Africa was formulated in June 1980, which eventually led to the Yamoussoukro Declaration of October 1988. This established a new air transport policy with a primary purpose of creating an environment conducive to the development of intra-African and international air services. At a meeting in Mauritius in 1994, a decision was made to accelerate the implementation of the YD, especially in relation to the granting of traffic rights, regional co-operation and the role of government.

In November 1999, the heads of state made a decision (henceforth known as the Yamoussoukro Decision), which was to lead to the full liberalisation of the air transport market. The articles of the decision covered traffic rights, capacity and frequencies, designation and authorisation, competition rules, settlement of disputes, creation of an Executing Agency and transitional measures. No progress ensued. In May 2005, ministers re-affirmed the need to implement the YD.

The major resolution of the 3rd AU Conference of African Ministers of Air Transport in Addis Ababa in May 2007 was to entrust the African Civil Aviation Conference with the duties and powers to act as the Executing Agency for the implementation of the Yamous